There were numerous gainers on Friday, led by two stocks that rose following M&A news.
Petrohawk Energy (HK) rose more than 60% after BHP Billiton (BHP) agreed to acquire the company. The companies entered into a definitive agreement for BHP Billiton to acquire Petrohawk for $38.75 per share by means of an all-cash tender offer for all of the issued and outstanding shares of Petrohawk, representing a total equity value of approximately $12.1 billion and a total enterprise value of approximately $15.1 billion, including the assumption of net debt. The Petrohawk board of directors has unanimously recommended to Petrohawk shareholders that they accept the offer.
The transaction would provide BHP Billiton with operated positions in the three world class resource plays of the Eagle Ford and Haynesville shales, and the Permian Basin. Petrohawk’s assets cover approximately 1 million net acres in Texas and Louisiana, with estimated 2011 net production of approximately 950 million cubic feet equivalent per day (MMcfe/d), or 158,000 barrels of oil equivalent per day (Mboe/d). At year-end 2010, Petrohawk reported proved reserves of 3.4 trillion cubic feet of natural gas equivalent (Tcfe). The company has a current non-proved resources base of 32 Tcfe for a total risked resource base of 35 Tcfe.
Clorox Corporation (CLX) closed 9% higher after it received an unsolicited conditional proposal from Icahn Enterprises (IEP) to acquire the company for $76.50 per share, subject to due diligence, financing and other conditions. Clorox's board of directors, in consultation with its financial and legal advisers, will review the proposal in due course.
General Moly (GMO) climbed 6% after it announced that the company, through a subsidiary, received approval of its water applications for the Mt. Hope mine. On July 15, the Nevada State Engineer issued ruling 6127 granting the company's water right applications for the use of 11,300 acre-feet annually (afa) of water for mining purposes, which will facilitate the pumping of approximately 7,000 gallons per minute. The specific water right permits are anticipated to be issued following payment of statutory fees, and, following the State Engineer's approval of a Monitoring, Management, and Mitigation Plan (3M Plan), prepared in cooperation with Eureka County, the water will be available for consumptive use.
Coeur d`Alene Mines (CDE) rallied 7% after it announced a change in its executive officers. The company said that Mitchell Krebs was appointed as president and chief executive officer of the company. The board of directors also elected Krebs as a director and Robert E. Mellor as non-executive chairman of the board. Krebs and Mellor are succeeding Dennis Wheeler, who resigned from Coeur as president, CEO and chairman of the board on July 11. The appointments follow an exhaustive internal and external search conducted by the board as part of the company’s succession planning.
Allied Irish Banks (AIB) popped 17% after the company announced that it passed the EU bank stress tests. The result of the EBA stress test takes into account the recapitalization measures announced following the Prudential Capital Assessment Review (PCAR). The EBA methodology includes a number of differences to the methodology applied in the PCAR exercise conducted by the CBI in March 2011. The EBA stress test set a 5% Core Tier 1 capital requirement in the stress scenario, while a level of 6% was applied in PCAR. The PCAR was applied on a three-year horizon from 2011-13 compared to the two year 2011-12 timeline applied by the EBA. The EBA 2012 stress scenario expects AIB, post recapitalization, to have a Core Tier 1 capital ratio of 11.7% (including €1.4bn contingent capital). There were also additional significant methodology differences applied to AIB in the EBA stress test versus PCAR including future balance sheet size, higher risk weightings, application of higher funding costs and treatment of sovereign and bank credit losses.
The published results confirm that in all scenarios tested, AIB exceeds the EBA stress test threshold of 5% Core Tier 1 capital ratio and a significant capital surplus is evident in both the base and stress scenarios.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.