Q: I have owned BTE for a few years now and it is no surprise I am underwater on it in all the accounts it is held. As the price of oil continues its slow march downward I am working out what to do with my O&G stocks. Most are solid companies and many have a decent dividend to tide one over. Baytex is one that does not; that is in addition to its dismal performance over the years.
I would like to know if the assets of Baytex, at some point, would be a useful "fit" for another firm when merger mania hits the oil patch? If so, who would be the likely bidders?
With oil price forecasts into 2025/26 looking dismal if one abandons the idea of a suitor buying BTE, would you still view it as a hold, or is it better sold and the money put to a more accomplished non-O&G growth story?
Thanks as always.
Dave
I would like to know if the assets of Baytex, at some point, would be a useful "fit" for another firm when merger mania hits the oil patch? If so, who would be the likely bidders?
With oil price forecasts into 2025/26 looking dismal if one abandons the idea of a suitor buying BTE, would you still view it as a hold, or is it better sold and the money put to a more accomplished non-O&G growth story?
Thanks as always.
Dave
5i Research Answer:
We have long viewed BTE as a target. Long-suffering shareholders we think would welcome a deal. CVE would have been a logical buyer, but it is busy with MEG. CNQ, ATH would make sense. WCP is a possibility. We would likely rule out a US company due to the current trade dispute. At current (low) valuations, BTE looks better than it has before. Its balance sheet problems have been largely fixed. Still, we would not miss it if it was sold.