Q: Hi folks, thoughts on Advantage Energy aav/t buy of Longshore Resources for $450M....good deal/overpaid???....stock sold off on $11/share finance but Scotia positive on transaction & company (but they participated in finance)....increased their T to $20 & NAVPS a share to $25.45....U like company??.....thanks, jb
5i Research Answer:
All the remaining big 5 banks raised their targets on AAV following the deal. Analyst commentary was largely positive and noted that the deal will be highly accretive for AAV by expanding the company's oil weighting, but the company will have to pause its share buyback. We do like AAV and think that the deal will help the company grow in future quarters especially with a rising energy market.