Report about Apache Corp. sends its stock up 13 percent.
Apache Corp. shares surged 13 percent on Monday after a report the previous day claimed the Houston-based oil company has rejected a buyer’s offer and has hired Goldman Sachs to help fend off a possible hostile takeover.
Bloomberg’s report, citing anonymous sources, said it’s not clear if negotiations will continue after the rejected offer. Goldman Sachs and Apache, which was worth $25 billion in enterprise value on Monday, declined to comment.
Apache’s stock-price surge came on a bad day for the broader oil market and energy stocks, as fresh concerns about global oil demand helped push U.S. crude down to $43.76 a barrel. In mid-day trading, investors erased $9.14 billion from the stock-market value of the two largest U.S. oil companies, Exxon Mobil Corp. and Chevron Corp.
The report on Apache also comes amid speculation that crude prices have been flat and low for long enough to prompt oil companies to put themselves on the auction block for prices that reluctant buyers would pay.
There have been a few corporate oil mergers this year, including Shell’s proposed purchase of BG Group and Noble Energy’s acquisition of Rosetta Resources, but deal activity has been nowhere near the wave that analysts had predicted at the start of the year. That’s because investors and sellers believed crude prices might recover quickly, and selling themselves when crude prices were low for only a short time could prove foolish.
Analysts at Simmons & Company International believe Exxon Mobil and BP are the most likely prospective buyers for Apache, writing Monday that after the Deepwater Horizon oil spill Apache bought BP assets in West Texas, Canada and Egypt – which would do well back in BP’s portfolio.
And Exxon Mobil has long been analysts’ favorite to make a corporate purchase this year.
The Irving-based oil giant hasn’t made a big play since it bought Houston shale gas driller XTO Energy in 2010 and it has the biggest and best-equipped balance sheet for an acquisition.
“Apache offers an acquirer a solid asset base in North American with some quality international exposure in Egypt and the North Sea,” the Simmons analysts wrote.
Shares in Apache closed at $53.92, up $6.25 or just over 13 percent.