In a recently published article, Geoff Foster wrote that, "Billionaire US investor and corporate raider Carl Icahn recently increased his stake in Chesapeake Energy to 10%. Dealers on both sides of the Atlantic are convinced that the man who began his career as a Wall Street stockbroker in 1961 is confident that the second largest natural gas producer in the US, which is heavily into fracking, will soon attract a foreign cash bid in the region of $40 a share. A number of dealers heard that both BP and Royal Dutch Shell could be running the slide-rule over the Oklahoma-based company whose shares yesterday touched a 52-week peak of $27.67".
Although I strongly believe that a potential takeover could occur in the next 18-36 months, I'd personally like to a see a much higher bid than the proposed target of $40/share. For example, a bid that would fall in the range of $45.94/share to $53.59/share would subsequently value the company's market cap between $30 and $35 billion. This would clearly be much more attractive than the $26.12 billion the company is valued at when you consider the hypothetical bid of $40/share. Any continued discussion about a potential takeover should shed shares higher in the near-term, but if such rumors were simply untrue shares could be headed down a fairly unfavorable path.