Talisman finds a taker – and then turns it away
Also: a speculative small-cap pick from AltaCorp Capital's Jeremy McCrea
When he was younger, Max Fawcett wanted to make a mint in the markets. Now as the managing editor of Alberta Venture he gets to write about them. Close enough, right? He can be reached at email@example.com
by Max Fawcett
It seems like Talisman Energy (TSE:TLM) has been looking for a buyer for years now. And according to a Globe and Mail story yesterday, it sounds like it found one – and then decided to turn it away. Apparently, it rejected a US$17 billion bid from GDF Suez SA, a French electric and energy utility – and, after being unable to agree on terms for the entire company, turned down a second, smaller offer for a portion of it. “The rejected bid underscores Talisman’s commitment to completing its sweeping reorganization and avoiding a fire sale,” the Globe’s Jeffrey Jones and Carrie Tait wrote. “Chief executive Hal Kvisle has said his priority is on cleaning up the oil and gas company before he makes his exit some time in 2014.”
Shifting to the small cap space, AltaCorp’s Jeremy McCrea put out a very bullish note today on Yangarra Resources (TSXV:YGR). He likes the fact that the company had some substantial insider buying during its more recent financing (which took place at $0.54 per share) and plenty of management ownership to boot. “We believe it is only a matter of time before investors follow suit as well,” he wrote. And why? The company operates some of the most efficient Cardium wells in AltaCorp’s coverage list, while also boasting some pretty impressive growth prospects – AltaCorp expects 37 per cent-plus cash flow per share growth in 2014 and beyond. It also has a healthy balance sheet, with a debt to cash flow ratio of just one-times and plans to spend within its operating cash flow in 2014. “With high cash flow margins and hedges into 2015, Yangarra is well protected against declining commodities,” McCrea wrote. He stuck $1 target and a speculative rating on its shares.