Advice on a stock I own: APC (Anadarko Petroleum)

Discussion in 'Business, Investing & Finance' started by BMF, Apr 14, 2019.

  1. BMF

    BMF Bad Mother....
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    I own about 650 shares of APC. It shot up 32% on Friday ($14.98/share). I was actually down overall, as I've owned this stock off and on for years - it pays good dividends and is a solid company. Anyhow, Chevron made an offer to buy the company and the stock shot up. I've been reading about the deal and it doesn't seem like the deal is signed/closed yet and there could be other offers to buy APC. I'm not sure if I should sell and take the profit right now or wait to see what happens. Obviously if the deal goes through and Chevron buys it the stock will be converted to Chevron....but what happens if there's a delay or speculation that another company is making a run at buying APC?

    Thoughts? Should I sell or hang on?

    Thanks!
     
  2. 78

    78 Dazed and Confused
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    APC has been the subject of several analyst downgrades over the past few days. I'd probably consider taking half off the table.
     
    • Chompsuey

      Chompsuey Member

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      I'm curious how this plays out as well. I have a couple hundred shares of Chevron that have made me quite a bit over the years. My company did quite a few road bores to tie their pipeline in over in the Permian Basin. Anadarko is about to tie a bunch more pipeline in from Northern Colorado and Southern Wyoming. Massive project. Just based on their future work and minimal stocks knowledge I would hold onto it.
       
      • FireFoley

        FireFoley Senior Member
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        @BMF, normally I would say sell immediately if not sooner and do not try and play the arbitrage, but this to me has the makings of being drawn out. I think the deal worked out to be about 63 a share, part cash part stock. but it has been reported and confirmed that Occidental Petroleum offered APC 70 bux a share. Yet the APC people opted for the CVX offer due to some land sharing and other things. However I have a hard time seeing the APC shareholders ceding to a lower bid without at least a fight or making a stink. Maybe consider lightening up a bit and perhaps CVX will have to sweeten the offer to appease some unhappy APC shareholders?
         
        • BMF

          BMF Bad Mother....
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          Thanks FF. I saw the Occidental offer, which was a while back. There are reports that CVX may sweeten the deal....or another company may outbid them. I'm really torn on this one. I think I'm going to hang on through tomorrow, but will likely make a move this week if it shoots up again.
           
        • divits

          divits A Muffin of the Studly Variety
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          I'm going through this now with Celgene and Bristol Myers. BMY is buying out Celgene and the deal looks to be a great one for me seeing as how I own CELG. I bought at around $70 and the deal could be worth $110. I went through this last year with Takeda and Shire. That one didn't work out as hoped. It was a cash/stock deal and Takeda's stock dropped a bunch and the deal never came close to being worth what it was originally when the deal was announced.
           
        • bradgator2

          bradgator2 Internet Bully
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          Nothing related to APC. But I just had my biggest single day stock jump with QCOM due the Apple news. It's up 23% in the last hour and climbing.

          My adviser strongly encourage this buy about 2 months ago and I was pretty lukewarm about it.
           
        • 78

          78 Dazed and Confused
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          Up 15% in the pre-market. I'll be shorting it later in the morning.
           
        • GatorInGeorgia

          GatorInGeorgia Senior Member
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          BMF, I also own APC. It’s been a good investment for me. Me recommendation is to hold it. Oxy had made an offer for Anadarko prior to Chevron agreeing to buy them for $65. The OXY offer was priced in the mid 70’s with the potential to raise their price if need be. I wouldn’t be surprised to see either a hostile bid that would push the price higher or Chevron having to up their offer to close the deal. Personally, I think Anadarko is worth more than what CVX is offering. Worst case scenario is you wait a few months, no better offers come in and you can sell close to $65 or take the CVX stock/cash offer when it closes.
           
          • GatorInGeorgia

            GatorInGeorgia Senior Member
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            I believed the Oxy offer was very recent. Info I read said Oxy was caught off guard and expecting talks to continue over the weekend after the CVX deal was announced, with the possibility of Oxy raising their offer. Personally, I think APC should fetch mid 70s at a minimum and possibly as high as low 80s.
             
          • BMF

            BMF Bad Mother....
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            GiG, thanks for the inputs. I sold about half of the stock on Monday (and, of course, it went up). I'm going to hold onto the remaining shares and see what happens. There's apparently an investigation into the APC BOD to see if they voted in the best interest of shareholders by going w/ CVX vs. Oxy. Either way, it's a great company that's made me some money over the last 5+ years.

            Question; if I hold onto the APC shares they will convert over to CVX, right?

            Thanks again!
             
          • GatorInGeorgia

            GatorInGeorgia Senior Member
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            Yes, most of it will. You will get $16.25 in cash for each APC share you own & the rest will be Chevron stock.
             
          • FireFoley

            FireFoley Senior Member
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            Certainly not a takeover story or battle like APC, but today Blackstone (BX) announced they are switching their company from a limited partnership to a C-Corp. KKR did this a year of so ago and the stock shot up about 30% only to drop over a period of time. Well BX went up today just under 10%, but it is by far the largest private equity firm out there and owned by many. However many managers and funds were unable to own BX for tax purposes and the K-1 as a partnership. However with the change many more will be able to own the stock, but they will now just have an ordinary dividend and not have to payout 80+% of their profits. I have owned it for years and enjoyed that 7+% annual return, and assume the dividend will be set at around 2.5% (similar to KKR) but I did have good upside to the stock. Any thoughts on keeping it or taking the money and deploying elsewhere?
             
          • FireFoley

            FireFoley Senior Member
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            OXY steps back into the APC fight with CVX this morning and APC is up about 7 bux trading at 70. I had a sneaky feeling that the shareholders were not going to go away quietly. Hope you held a few shares @BMF.
             
            • BMF

              BMF Bad Mother....
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              Nice! I still have around 200 shares.... Thanks!
               
            • BMF

              BMF Bad Mother....
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              I'm torn on what to do, I'm up $1400 on the day which puts me well ahead on this stock. I sold 300+ shares last week to cash in (which has now cost me $2000+). Should I get out? Hang on? Thoughts?
               
            • bradgator2

              bradgator2 Internet Bully
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              I jump on Pinterest: PINS

              It sounds so dumb... but all I know is my wife and her friends spend 10x more time on that site than any other website on the planet
               
            • GatorInGeorgia

              GatorInGeorgia Senior Member
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              Damn right we aren’t going away quietly! :)
               
            • GatorInGeorgia

              GatorInGeorgia Senior Member
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              Depends on how long you’re willing to wait. I think you may be able to ride this up to $73 over the next few days. If you have something better to invest in, then maybe see if you can squeeze another $2 out of it then bail. I wouldn’t be surprised to see this thing ultimately go for $78-$80 per share but I think that may take several months.

              Personally, I still think it’s undervalued at $80 but if I can get $75/$77 per share in the next weeks, I’ll probably sell all my shares and rotate into something else.
               
              • BMF

                BMF Bad Mother....
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                I sold! It got over 12% up and I pulled the trigger.

                So....it's probably a good time to buy, it'll likely go up now!
                 

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