(October 13 – 16:30 ET) –
Analysts at Salomon Smith Barney
have digested the takeover documents
filed for Burlington Resources
Inc.’s proposed acquisition of
Calgary’s Poco Petroleum.
They’ve come out in favour of the
deal, reiterating their rating of
Burlington.
Salomon says the deal gives
Burlington a foothold in the
Western Canadian natural gas
business, solidifying it as
North America’s top natural gas
producer. It says that
Burlington is paying a 10% premium
for Poco, but that the deal
should accrete. Salomon estimates
the acquisition will add 25¢US
per share in cash flow in 2000,
and will be neutral to earnings.
Burlington will pay 0.25 of its
shares for each Poco share and
will assume US$750 million of
debt. Salomon says this leaves
Burlington’s balance sheet
strong, and keeps the company in
a position to make future deals.
-IE Staff
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