What Are the Oil Refiners Worth?
James Shell submits:I am still scratching my head over the Holly Corp (HOC) / Frontier Oil (FTO) merger. We summarized the deal yesterday, and noted that the cost of over $15,000 per BOD capacity was historically pricey.
Transaction Cost $ 2,900,000,000
FTO's Capacity BOD 187,000
Cost per BOD 15508
In light of this, let's go look at a few more of the refiners and determine what they're worth if you value their refining capacity at the same level as was just paid for FTO's:
WNR VLO TSO
Refining Capacity bod 235,000 2,300,000 665,000
FTO cost per bod 15,000 15,000 15,000
Proj Company Value 3,525,000,000 34,500,000,000 9,975,000,000
Shares Outstanding 88,300,000 566,210,000 143,160,000
Value/Share at FTO price 40 61 70
Current Actual Stock Price 17 28 24
Current LTD/Share 11 13 13
Effective Takeover Cost/Share 28 40 37
Effective $/ BOD Capacity 10,470 9,918 7,940
Here's the calculation: You take the $15,000 per bodComplete Story »
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