06
Jan
Saturday Bonus Post – SWN and CHK
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In today's post please find:
- Cheat sheet updates for CHK and SWN ahead of a possible merger Monday.
Click the link directly below this to continue ...
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Stuff We Care About Today
On Friday WSJ claimed that sources say the two are close to a merger. This is the second recent time story on this possible deal with the last one coming in October.
In our view a deal would make a lot of sense given their positions in the Marcellus and Haynesville.
Please find below updated cheat sheets for both names.
We would find a deal that gives SWN shareholders on our about 0.1x shares of CHK for each SWN share as acceptable, implying a no arbitrage spread value on SWN in the high $7's which is in line with our Base Case 2024 EBITDA upside target of $7.75.
We don't know if a deal is coming soon or at all but again, it makes sense and CHK has the currency and balance sheet to make this a merger of equals with CHK last team standing at the end of the day. Often we write that we'd rather not see our names get bought but in this case I think it's time the two become one and SWN go away. SWN is our 5th largest holding and we hold a small position in CHK as well.
Have a good weekend,
Z
SWN Cheat Sheet
CHK Cheat Sheet-
interesting article on European offshore wind.
https://maritime-executive.com/article/european-offshore-wind-market-scheduled-for-rebound-in-2024
January 8th, 2024 at 12:51 pmre 1 – thanks, will take a look.
January 8th, 2024 at 1:25 pm