J.P. Morgan Not Surprised With The Recent Acquisition of HK

J.P. Morgan maintains its Overweight rating on Petrohawk Energy HK following the company's recent acquisition by BHP Billiton BHP. Says J.P. Morgan, in its report, “Petrohawk announced that BHP Billiton (BHP AU, covered by Fraser Jamieson), will buy the company, in an all-cash deal, for $15.1B. The deal values the equity at $12.1B or $38.75/share… As we wrote in the Thesis of our latest notes, ‘Given the attractive valuation and its asset concentration, HK likely is one of the more attractive takeover targets in the sector. Management sold two companies in the past _ Hugoton Energy to Chesapeake (1998) and 3TEC to Plains (2003) _ and has expressed that Petrohawk's assets might be better suited for development within a larger company.'” HK and BHP closed yesterday at $23.49 and $92.28, respectively.