RE:suncor take over?How exactly would they do that? All the deals being done at present are stock-only transactions, asides from the CNQ/PONY transaction, since the size of the deal is pretty negligible, compared to the size of CNQ.
You obviously have no idea how capital markets work, if you think anyone can just go out and borrow as much as they want. Yes, interest rates are low. However, energy is still considered a fairly high risk industry to lend to, due to the volatility of cash flows (as we have seen).
CNQ is still considered investment grade at present (BBB), but on the lower end of the scale. Imperial is a subdiary of Exxon, which owns approx. 70% of that company. While Exxon still has AA rating, they are also in capital preservation mode at present. There are already doubts that XOM can maintain their dividend at current levels. In fact, this year marks the first time, since 1982, where the company has not grown their dividend.
As for Suncor itself, its not exactly hurting badly enough to be need to merge or be taken out. They still maintain investment grade status at BBB+. In April, they raised an additional $1.25 billion, selling notes at approx. 5% yield. If you look at what their bonds are being priced at currently, in the secondary market, they are priced well above par. It also helps that they made a pretty significant dividend cut in May, which helps with capital preservation.
sunshine77 wrote: Maybe CNQ and IMO can partner up and take out SU at $20.00 a share and put it out of its misery.There are a lot of smaller oils that can be taken out as well CPG, ARX, BTE, CVE, ERF.... and so on.
crazy things are going on in this world why not this. After all didn't the Finance minister say that rates are going to stay low for along time, so go ahead borrow as much as you want. CNQ and IMO together would be able to secure billios need for these transactions.