Canaccord Genuity Morning Coffee on Chesapeake Energy (CHK): Rumor Has It...
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Rating Summary:
20 Buy, 18 Hold, 8 Sell
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Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
20 Buy, 18 Hold, 8 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Canaccord Genuity Morning Coffee on Chesapeake Energy (NYSE: CHK): Rumor has it...
According to a Bloomberg report citing sources close to the matter, Chesapeake Energy is close to selling its pipeline assets to Global Infrastructure Partners for more than $4 billion. The move could help the debt-laden company raise cash amid an estimated $22 billion cash-flow shortfall and slumping natural gas prices. Talks between Chesapeake and Global Infrastructure are at an advanced stage and could lead to a pact within days, though they may still collapse. The centerpiece of the deal would call for Chesapeake to sell its entire stake in Chesapeake Midstream Partners (Nasdaq: CHKM), which has 4,000 miles of pipelines and is one of the largest natural-gas gatherers and processors in the U.S. Chesapeake has a 45.2% share of Chesapeake Midstream's common units, valued at about $1.6 billion. Chesapeake's largest shareholders, Southeastern Asset Management with a 13.6% stake, and Carl Icahn with a 7.6% stake, have been pushing for the company to shed its pipeline assets and other non-core business in order to focus on its core oil and gas drilling assets. Earlier in the week, the two biggest shareholders also won four seats on the company’s board of directors.
According to a Bloomberg report citing sources close to the matter, Chesapeake Energy is close to selling its pipeline assets to Global Infrastructure Partners for more than $4 billion. The move could help the debt-laden company raise cash amid an estimated $22 billion cash-flow shortfall and slumping natural gas prices. Talks between Chesapeake and Global Infrastructure are at an advanced stage and could lead to a pact within days, though they may still collapse. The centerpiece of the deal would call for Chesapeake to sell its entire stake in Chesapeake Midstream Partners (Nasdaq: CHKM), which has 4,000 miles of pipelines and is one of the largest natural-gas gatherers and processors in the U.S. Chesapeake has a 45.2% share of Chesapeake Midstream's common units, valued at about $1.6 billion. Chesapeake's largest shareholders, Southeastern Asset Management with a 13.6% stake, and Carl Icahn with a 7.6% stake, have been pushing for the company to shed its pipeline assets and other non-core business in order to focus on its core oil and gas drilling assets. Earlier in the week, the two biggest shareholders also won four seats on the company’s board of directors.
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