Why Falcon Minerals Stock Fell as Much as 12% Today
Shares of Falcon Minerals (NASDAQ: FLMN), which owns royalty interests in onshore U.S. energy lands, fell as much as 12.5% on Wednesday. By roughly 1 p.m. today, the stock had regained some of the lost ground but was still lower by about 8.5%. A merger was the big news, but it's a little complicated.
To get the easy stuff out of the way, Falcon Minerals agreed to join forces with privately-held Desert Peak Minerals in a $1.9 billion deal. Both companies own royalty interests in onshore U.S. oil and natural gas lands, so the combination is complementary.
More importantly, the goal is to increase in scale so the combined entity can become an even more effective royalty consolidator. The deal is expected to close in the second quarter of 2022. There's already support for the deal from an institutional investor who owns 40% of Falcon Minerals and is affiliated with Blackstone. From this big-picture perspective, the deal seems to make a lot of sense.
Source Fool.com
