Why Baytex Energy Stock Is Plunging Today
Baytex Energy (NYSE: BTE) shares were plunging this morning, down 8.7% as of 10 a.m. ET. The Canada-based oil and gas producer announced a big acquisition today and also intends to reinstate a dividend, but investors worry this may not turn out as good as it appears.
Baytex Energy, which operates in the Western Canadian Sedimentary Basin and the Eagle Ford in the U.S., will acquire Ranger Oil (NASDAQ: ROCC) for $2.5 billion including debt of $650 million in a deal expected to close in the second quarter. Ranger shareholders will receive 7.49 Baytex shares plus $13.31 in cash for each Ranger common share, for a total consideration of roughly $44.36 per share. That represents a premium of around 7% over Ranger Oil stock's Monday closing price.
This looks like a big growth leap for Baytex Energy for several reasons. First, Ranger Oil is a pure-play Eagle Ford company and will therefore significantly boost Baytex's foothold in the shale basin.
Source Fool.com
