Potential M&A in the Cooper Basin

We believe that a merger of BPT and DLS is more likely following the departure of DLS MD Brad Lingo last week. Seven Group (SVW) has bought 19.9% in both BPT and DLS over the last six months, at a cost close to $400m. Seven is keen to see consolidation of these Cooper Basin focused stocks, and some synergies are obvious. BPT operates DLS’s most valuable asset and combined corporate overheads could be cut from $50mpa to $30m, or less in our view. We believe Mr Lingo was opposed to a merger with BPT, and his departure will make any discussions between the two companies easier. We can only imagine a scrip merger, as cash conservation is king for oil and gas companies at present, but DLS should get the more favourable terms, as the smaller company being acquired by its Big brother BPT. We recommend a Hold on DLS (VIEW LINK) and Sell for BPT (VIEW LINK).


Canaccord Genuity Group is a leading independent, full-service financial services firm. Canaccord Genuity has been driven by an unwavering commitment to building lasting client relationships. We achieve this by generating value for our individual,...

Expertise

No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.