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EXCO Resources Inc. Message Board

  • quantuon quantuon Jun 8, 2012 9:23 AM Flag

    So what will TGGT fetch ?

    well CHK owns 46% of CHKM and they are selling for $2bn.....last years ebitda was 350 and 2012e is 475 (take that with a grain) they sold for an ebitda multiple of 12.4 and 9.15, respectively. I would guess that those are premiums (vs what exco owns) because a) scale -> much larger operation -> cost savings, synergies (i hate that word).... and b) there are some GP shares and I am sure there must be some incentive rights (i did not have time to look)....

    so if we blindly use those with xco we get

    last year XCO's share of TGGT ebitda was about 35 mn where i adjusted for the outage they had (affected about 9% of processing). If we put the same multiple of 12.4 on it we get a sale price of $434. If we use their midpoint guidance of $67 for 2012, we'd get $613. I believe their guidance for '12 is way too high but split the difference and you are talking about a sale of probably closer to $500mn if that as the risks are the multiple will be lower and CHK has now set the market

    that is probably why we have not heard anything yet because they are not getting what they thought they would.....

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