Exxon Buying XTO

[txlaw]

F---!  Why did I fu----- sell XTO?!

 

That's what I get for letting macro worries (carry trade reversing) overshadow the fundamental value of a company's stock.

 

I bet Buffett continues to add more XOM over the next quarter or so.  What a great deal!

 

[DCG]

The street doesn't like the fact that it's an all stock deal and that XO is assuming $10 Billion in XTO's debt, but it otherwise sounds like a pretty good deal to me. I have a small position in XOM but will add to it if it continues to sell off a bit more.

[Zorrofan]

Cheaper to buy reserves than find them on your own? I have a feeling that this is the start of some consolidation in the energy sector....

 

cheers

Zorro

[txlaw]

Here's a Bloomberg article on the beginnings of the XTO deal:

 

http://www.bloomberg.com/apps/news?pid=20601109&sid=aAsD6B.ip9iU&pos=13

 

It's interesting to see how Exxon is taking an almost Berkshire-like approach to keeping XTO organizationally intact.  And the fact that Bob Simpson went for an all stock deal also seems very much like a Berkshire style acquisition, only Simpson is getting shares in a diversified energy conglomerate rather than an diversified "any great business" conglomerate.

 

Also interesting to see how Jefferies (major LUK investment) was involved with the deal.  I wonder if they'll win more business because of this deal?  Don't really know much about how the investment banking world works.