Lundin Energy sale would be better than a merger

  • 11/30/2021
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LONDON, Nov 30 (Reuters Breakingviews) - Sweden’s Lundin family may be getting itchy feet again. Oil and gas company Lundin Energy (LUNE.ST), in which the family holds a 33% stake, is considering a sale or merger, Bloomberg said on Monday. The company’s vague statement that it will consider opportunities dampened some of investors’ enthusiasm, erasing the 10% gain in the $10 billion company’s stock price after the article. The Lundin family has a history of savvy dealmaking, for example selling out of Red Back Mining for $7 billion in 2010. Now is a good time to cash in some chips. Lundin’s fields are efficient, with a pre-tax breakeven price of $18 per barrel, according to JP Morgan, and relatively clean; the company says its operations can be carbon neutral by 2023. That could make it attractive to a diversified energy major. Shareholders, however, may prefer a clean exit at a rich price over a messy merger with a less desirable partner. Lundin trades at 10 times 2022 earnings, more than double the industry median, according to Refinitiv data. Any buyer will need deep pockets. (By Dasha Afanasieva) Wise’s investors keep faith with fintech mission read more Moderna’s $40 bln shot gain read more Saudi stock market cashes in on its own growth read more Meituan serves cold warning on Chinese consumers read more Software AG can log onto buyout boom read more

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