© Reuters.
Earlier today, Reuters reported that Devon Energy (NYSE:) has approached Enerplus with an acquisition offer.
The report offered no details on potential terms of the deal, but the rumor alone was enough to send Canadian-traded shares of Enerplus nearly 8% higher.
Commenting on the development, analysts at Stifel believe “it is highly likely that a deal is in the works based on the accuracy of pre-deal reports, industry-wide, over the past year.”
“While the transaction value could exceed $5.0B CAD based on our PDP and Bakken inventory assessment, we believe Devon’s stock performance and the current environment necessitate pursuing a low-to-no premium transaction to keep it accretive,” the analysts added.
“Net-net, we believe a transaction of $3.5B-3.7B USD ($4.8B-5.0B CAD) makes considerable financial and strategic sense for Devon based on potential synergies (could exceed $0.2B USD), the quality of Enerplus’ acreage position and Devon’s strategic need for greater inventory depth in the Bakken.”
Enerplus’s market cap stood at just shy of CAD $4B at the time of this writing.
