MEG & ATH merger?Is it even possible? Well, almost anything is possible these days, but would that little scenario be beneficial for both companies and their respective s/h if it were really to happen? Over the past few months, i've been struggling with the current state (and fact!) of their repsective share pirces, both literally trading near their 52 week highs where most of the sector, if not all, including the big "almost riskless majors having their own share price in the literal dumps.
So what gives? I don't see anything in their recent respective financials or anything made public to investors to this date, that would explain or justify this situation. Nothing, absolutely NADA. They, mea ning both Meg & ATH should be trading in lock & step with companies like Sucor & Cenovus, just at a more discounted level than them. At first, I thought it was only an isolated situation with Athabasca, mabye something was occuring there behind the scenes, that weren't aware of or privvy to. But now BOTH companies trading at their 52 week tops, well, that's statistically unlikely or a very low probability without some valid reason. And the only reason i could find to justify such a move in their share prices AND FIT BOTH companies is a possible merger possibilty. Now some might find it hard to grasp, accept or beleive and think i'm off the Indian reserve.....but think about this nefore you judge.....
Both companies are heavy crude producers who are operating in more or less in the same area AND both have much to gain from such a union. Also, remember folks, MEG is one of the only large "heavy crude" mid caps who hasn't made a major move or asset acquisition in the last few years. All the rest have all done so at some point during that time. So i'm guessing that in order to compete on a viable level and remain relevant & competitive with it's peers.........MEG will make some kind of move soon on that front. I don't see them selling out btw, as they would have done so long ago, but i could see an accretive merger of sorts, like ATH to expand the company to a much larger entity....
I guess we will soon see what happens. If i'm wrong and there's nothing there, then i can't fathom the share prices of both companies to remain elevated at this level for much longer with WTI at $75 and the rest of the sector at the bottom of the barrel.
GLTA