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Consolidation in the Oil Patch – InsideArbitrage Friday Wrap

  • October 27, 2023

FRIDAY WRAP

Our list of curated tweets for the current week

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Consolidation in the Oil Patch

*walks into board meeting* Let's call it "Chess" *gets fired*

Two massive back-to-back $60 billion+ deals in the energy sector in less than two weeks.

Chevron said it would buy Hess in an all-stock deal worth $53 billion

Here's why investors should expect even more oil deals

ConocoPhillips weighs CrownRock bid to challenge rivals

M&A tied to Parker & Parsley

Interesting that there are many fewer ppl who think $EOG will be the next M&A partner

European oil giants, often overlooked, are regaining investor favor as they refocus on their core operations.

'Oil and gas capital spending has declined in recent years as companies focused on shareholder payouts and debt servicing.'

 

Special Situations

Mergers & Acquisitions

EngageSmart $ESMT to Be Acquired by Vista Equity Partners for $4 Billion, $23 Per Share

 

Wow, big 46% takeover premium for Textainer $TGH is 2.1B deal

$TGH - Buyout confirmed ! $50/share. Preferreds will be redeemed. Expected to close in Q1!

Note this is $5 per share below the $CSTR stock price in 2017 when instead of negotiating a sale to Gaylon Lawrence, they instead paid up to acquire Athens Federal.

Swiss Pharma Giant Roche Agrees $7.1Bln Deal To Buy Telavant Holdings

JetBlue $JBLU Spirit $SAVE v #DOJ trial has been pushed out for 3rd time.

As I research Jetblue Spirit $SAVE merger arb oppo I find some fascinating data.

$VMW $AVGO: The Monday deadline has passed for investors to decide whether to get paid in cash or Broadcom shares

Broadcom offers to VMware employees are rolling in today in advance of the expected Oct 30th merger closing date

Rithm boosts price for Sculptor, winning Och's, founding partners' approval

Capri/Tapestry filed for China SAMR clearance under simplified procedure

Danaher’s $DHR proposed acquisition of Abcam $ABCM on Oct 23 was accepted under a simplified #merger review with China’s State Administration for Market Regulation. Deal has already been cleared in Austria and Germany.

$SOVO $CPB - Sovos Brands falls after FTC request for more information on sale to Campbell Soup

This week's Quick Value -- First Horizon Bank $FHN

When the $MXL / $SIMO deal broke a little merger arb joke was "MXL is breaking because of a MAE; it's just they're the ones who suffered the MAE

Well this is a development. Confused how $FWRD can terminate given the supposed breached provisions in the merger document are 7.03

Potential Deals

$VFC VF Corp. is being targeted by activist investor Legion Partners Asset Management

Tang Capital through Concentra has been trying to buy some of them below cash. His latest attempt is $RAIN.

Silver Lake, currently holding approximately 71% of Endeavor's voting power, is actively contemplating a proposal to take Endeavor private.

$WDC Western Digital down 12% after talks with Kioxia on a merger deal fall through.

Fortress approached Whitestone REIT about a takeover (& was rebuffed) $WSR

Hollysys discloses new $25/share buyout offer from its co-chief operating officers

Stock Buybacks

Share Repurchase factor trades near historic low valuations

Marathon Petroleum $MPC declares $0.825/share quarterly dividend, 10% increase from prior dividend of $0.750.

$GMS approved a $250 million share repurchase program that terminates and replaces the previous share repurchase authorization of $200 million

Linde plc approved a new share repurchase program for up to $15 billion of Linde's ordinary shares

$V with expected dividend increase

C-Suite Transitions

The Pick is in: Morgan Stanley gets a new CEO

Goldman GSAM exec to accelerate fundraising and strategic partnerships

Investing

Special Situations Investing in Private Markets

Berkshire Hathaway purchased 1.3 million shares of $OXY this week (~$264 million) after a 4-month buying hiatus.

Buffett bought some more $OXY –– this time, above his previous buy-top. Long oil.

 

Earnings

Big congratulation to $SNAP for reporting $40M in Adjusted EBITDA and paying themselves $350M of SBC.

If you listen to 10 earnings calls across sectors, then look at headlines on Bloomberg, actual economic data you would get this impression: We have a simultaneously awesome and terrible economy.

This week's earnings remind me of a great chart from @_rob_anderson . @NDR_Research

$GOOG Alphabet Q3 FY23

$META Q3 2023

Microsoft with a double beat.

Netflix Q3 2023 earnings—Are you not entertained?

Comparing the growth trajectory to AWS from a similar starting point of ~$600mn of quarterly revenue shows that Azure continues to outpace AWS." $AMZN $MSFT

Outstanding quarter from industry leader Deckers.

Mastercard beats on EPS, misses on revs.

 

Visa slipping down almost -2% following an initial move higher after their results last night.

VISA CEO: “.. we're not economic forecasters and so, at a macro level, we are assuming no recession

The U.S. Economy

The US economy grew at a breakneck 4.9% annual rate in Q3, the fastest growth since 2021.

The economy is “very strong”, yet we are running a $2 Trillion deficit. If that’s the case, why not reduce the deficit now?

Key measures of inflation have reaccelerated in recent months...The implication for investors is that the Fed will keep rates high until nonfarm payrolls go negative, because that is what is needed to get inflation under control

Regional bank carnage and recent rise in auto delinquencies to long-term historical highs indicate U.S. economy slowing significantly.

Here is example of why I’m not overly worried about the banks if we hit a recession next year.

 

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