Why Callon Petroleum Stock Is Soaring Today
Shares of Callon Petroleum (NYSE: CPE) rallied nearly 14% by 3:30 p.m. EDT on Monday. Fueling the energy company's surge was news that a major shareholder plans to vote against its proposed merger with Carrizo Oil & Gas (NASDAQ: CRZO).
In July, Callon Petroleum agreed to by rival Carrizo Oil & Gas for $3.2 billion, which included the assumption of debt. That price valued Carrizo at $13.12 a share, which was a 25% premium. The Permian Basin-focused company justified that higher price because it believed that the deal would immediately boost earnings and cash flow per share. Further, it estimated that it would be able to generate more than $100 million in free cash flow starting next year.
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Source Fool.com
