Investigation into Coterra's Transaction with Devon Energy
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
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Source: PRnewswire
- Transaction Structure: Coterra shareholders will receive 0.70 shares of Devon common stock for each Coterra share, resulting in Devon shareholders owning approximately 54% of the combined company, while Coterra shareholders will hold about 46% on a fully diluted basis, indicating a significant shift in shareholder structure post-merger.
- Board Responsibility Investigation: Ademi LLP is investigating whether Coterra's board fulfilled its fiduciary duties to all shareholders in light of the potentially detrimental terms of the transaction, raising concerns about the board's conduct.
- Competing Transaction Restrictions: The transaction agreement imposes significant penalties on Coterra for accepting competing bids, which may hinder Coterra's market competitiveness and limit shareholder options, potentially impacting overall shareholder value.
- Insider Benefit Concerns: Coterra insiders are set to receive substantial benefits as part of change of control arrangements, raising alarms about whether they are prioritizing personal gains over the interests of all shareholders, which could lead to increased legal liabilities.
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Analyst Views on CTRA
Wall Street analysts forecast CTRA stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for CTRA is 32.50 USD with a low forecast of 27.00 USD and a high forecast of 37.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
13 Analyst Rating
12 Buy
1 Hold
0 Sell
Strong Buy
Current: 28.850
Low
27.00
Averages
32.50
High
37.00
Current: 28.850
Low
27.00
Averages
32.50
High
37.00
About CTRA
Coterra Energy Inc. is an exploration and production company based in Houston, Texas with focused operations in the Permian Basin, Marcellus Shale and Anadarko Basin. The Company is engaged in the development, exploration and production of oil, natural gas and natural gas liquids exclusively within the continental United States. Its Permian Basin operation consists of approximately 345,000 net acres. Its development activities are primarily focused on the Wolfcamp Shale and the Bone Spring formation in Culberson and Reeves Counties in Texas and Lea and Eddy Counties in New Mexico. Its Marcellus Shale operation includes properties that are principally located in Susquehanna County, Pennsylvania, where it holds approximately 186,000 net acres in the dry gas window of the Marcellus Shale. Its Anadarko Basin operation holds around 182,000 net acres that are located in Oklahoma. Its development activities are primarily focused on both the Woodford Shale and the Meramec formations.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Investigation into Coterra's Transaction with Devon Energy
- Transaction Structure: Coterra shareholders will receive 0.70 shares of Devon common stock for each Coterra share, resulting in Devon shareholders owning approximately 54% of the combined company, while Coterra shareholders will hold about 46% on a fully diluted basis, indicating a significant shift in shareholder structure post-merger.
- Board Responsibility Investigation: Ademi LLP is investigating whether Coterra's board fulfilled its fiduciary duties to all shareholders in light of the potentially detrimental terms of the transaction, raising concerns about the board's conduct.
- Competing Transaction Restrictions: The transaction agreement imposes significant penalties on Coterra for accepting competing bids, which may hinder Coterra's market competitiveness and limit shareholder options, potentially impacting overall shareholder value.
- Insider Benefit Concerns: Coterra insiders are set to receive substantial benefits as part of change of control arrangements, raising alarms about whether they are prioritizing personal gains over the interests of all shareholders, which could lead to increased legal liabilities.
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