J.P. Morgan: Anadarko takeover by Exxon ‘unlikely’

A takeover of Anadarko Petroleum Corp. (NYSE: APC) by Exxon Mobil Corp. (NYSE: XOM) is “unlikely,” J.P. Morgan analysts said in a report Thursday following speculation this week of an acquisition of the Northern Colorado oil producer by the supermajor.

The Woodlands, Texas-based Anadarko, one of the largest oil companies in Weld County, hit a 52-week-high of $109.29 per share Thursday. The stock gained 4 points Wednesday to close at $108.32 following news reports of a potential deal between Anadarko and Exxon.

“We have no information about such a deal, but we think such a deal is unlikely,” J.P. Morgan analysts Joseph Allman and Kevin Kwan said in a report.

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The analysts said corporate exploration and production company acquisitions have been rare in recent years, unlike during the period between the late 1990s and mid-2000s, when the sector saw significant consolidation.

The analysts also pointed out that Anadarko recently estimated its net asset value at more than $140 per share, and the company would want a premium offer over that estimate. A 20-percent premium above the $140 per share net asset value would mean $168 per share, a 56-percent premium above Wednesday’s closing share price.

“It probably would be difficult for a potential buyer to justify such a premium above the current stock price,” the analysts said.

Anadarko will more likely execute transactions that add to its earnings, including monetizing its assets, the analysts added.

Anadarko spokesman John Christiansen declined to comment.

Anadarko shares fell less than 1 point to $107.67 while Exxon shares remained flat at $101.96 in afternoon trading.