Continental Resources shares jumped 15% on a ‘take private’ proposal
The Hamm Family wants to take Continental Resources private in a $$25 billion deal.
avatar
Khan is a professional trader and business writer with over 7 years of experience in several financial markets. Khan takes pride in sharing insightful articles with his readers that help them improve their investment portfolios.
2022-06-14 18:40

Continental Resources Inc closed up 15% in the stock market on Tuesday after a “take private” proposal from billionaire-founder Harold G. Hamm and his family.

The NYSE-listed company is the largest oil producer in the Anadarko Basin of Oklahoma.
Continental Resources shares jumped 15% on a ‘take private’ proposal
Details of the Hamm Family’s bid

The Hamm Family already owns roughly 83% of Continental Resources and is willing to pay $70 a share in cash for the remaining stake. The offer that values the Oklahoma-headquartered company at $25.41 billion translates to a 9.0% premium on the price at which the stock closed its regular session on Monday.

According to Continental Resources, it will set up a special committee comprising independent directors to evaluate the bid. It also “cautioned” investors that the Company has not yet decided on accepting or rejecting the proposal. There is, therefore, no guarantee yet that an agreement will be signed.

Hamms have no plans of resorting to strategic options even if the offer is rejected.

What else did Continental say in the press release

Continental Resources finds a spot on the list of top 10 independent oil producers in the United States. The press release announcing the Hamm Family’s proposal on Tuesday reads:

“Continental does not undertake any obligation to provide any updates with respect to this or any other transaction, or to provide any additional disclosures to reflect subsequent events, new information or future circumstances, except as required under applicable law.”

The news comes at a time when the ongoing war in Ukraine is keeping oil prices well above $100 a barrel, with many warning it could go much higher to $175 as well. Consequently, the iShares US Oil & Gas Exploration & Production ETF (IEO) is up more than 40% versus the start of the year 2022.

A brief recap of the CLR stock price action

Last month, Continental Resources reported better-than-expected profit for its fiscal first quarter. Its revenue, however, came in shy of what the experts had forecast.

Wall Street, at present, rates the stock at “hold”. On average, it sees upside to $75.37 a share – only a 2.0% increase from where the stock is trading right now.

The $27 billion company that trades at a PE multiple of 13.50 is up about 60% for the year. The current stock price is the highest its shares have achieved in the history of the company.


Disclaimer: I have no positions in any of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article. All information should be independently verified and should not be relied upon for purposes of transacting securities or other investments. See terms for more info.

Rate this article

positive
negative
Published On
2022-06-14 18:40

avatar
About the Author
Khan is a professional trader and business writer with over 7 years of experience in several financial markets. Khan takes pride in sharing insightful articles with his readers that help them improve their investment portfolios.


buy-coffee
You've read 1 article in the last year
..thank you for supporting us and for visiting our site. Unlike many other sites, The Dog of Wall Street is available for everyone to read. Our focus is to provide great content for free. Do you like what we are doing? Buy us a cup coffee. It is the fuel that keeps us going..

Looking Ahead to Tesla's Earnings: What Can We Expect?
Is there any stock that has been more talked about than Tesla (NASDAQ: TSLA) as of late? It’s a company that is always in the spotlight but the stock is under some heavy scrutiny this year and deservedly so.
By Mike Sakuraba | 1 month ago

2 Stocks to Load Up On During This Correction
Another volatile week for markets and investors are starting to feel a little uncomfortable.
By Mike Sakuraba | 1 month ago

2 Earnings to Watch for Next Week
This article is merely meant to talk about two companies that I’ll have my eyes on for earnings.
By Mike Sakuraba | 1 month ago

2 Stocks That Could Explode in Q2
Here are two stocks that I think could explode in the second quarter.
By Mike Sakuraba | 1 month ago

2 Trillion Dollar Companies in the Making
One thing for certain about these two companies is that I see the potential in how they can grow.
By Mike Sakuraba | 1 month ago

Is Tesla Back? Has TSLA Stock Finally Bottomed?
Tesla Stock Analysis: Robo Taxis to the Rescue?
By Mike Sakuraba | 2 months ago

2 Stocks to Buy During an April Pullback
Here are 2 stocks I’d buy during an April pullback.
By Mike Sakuraba | 2 months ago

TSM Stock: Is This The True Winner of the AI Race?
TSM’s stock has gained nearly 40% this year which is about half of NVIDIA has returned.
By Mike Sakuraba | 2 months ago