RBC Capital Markets has updated its outlook on Crew Energy (CR: CN) (OTC: OTC:CWEGF), increasing the price target to Cdn$6.75 from the previous Cdn$6.00, while keeping a Sector Perform rating on the stock.
The revision follows the announcement that Crew Energy will be acquired by Tourmaline Oil through a share exchange agreement.
Under the terms of the deal, Crew Energy shareholders are set to receive 0.11 shares of Tourmaline Oil for each share they hold. This exchange represents approximately a 72% premium over the price at Friday's market close. The acquisition by Tourmaline Oil is slated for completion in early October 2024.
The strategic process concluded with Crew Energy's decision to accept the acquisition offer, which is seen as providing substantial value to its shareholders. The transaction also offers Crew Energy's shareholders the opportunity to continue benefiting from the regional industry's success as part of Tourmaline Oil.
RBC Capital's updated price target reflects the terms of the announced acquisition. The premium offered to Crew Energy's shareholders through the share exchange with Tourmaline Oil is a significant factor in the revised target.
The acquisition is poised to finalize in the early days of October 2024, marking a notable event for both Crew Energy and Tourmaline Oil, as well as their respective shareholders. The deal is expected to enhance the combined entity's presence and operations in the region.
InvestingPro Insights
As Crew Energy (OTC: CWEGF) approaches a pivotal moment in its corporate journey, with the impending acquisition by Tourmaline Oil, investors may find the real-time data and insights from InvestingPro particularly enlightening. The company's stock has been trading near its 52-week high, reflecting a strong market sentiment bolstered by significant returns over the last week, month, and three months. This positive trend is underlined by a 78.21% one-week price total return, a remarkable feat for stakeholders.
Moreover, the financial health of Crew Energy presents a mixed picture. With a market capitalization of $787.14M and a reasonably moderate level of debt, the company is positioned to maintain its financial stability post-acquisition. However, it's important to note that short-term obligations currently exceed liquid assets, which could be a point of consideration for investors eyeing the near-term financial maneuverability of the company.
InvestingPro Tips suggest that while the stock is in overbought territory according to the RSI, analysts predict profitability for Crew Energy this year, a factor that could influence investor confidence. Additionally, the company has been profitable over the last twelve months. For those seeking a more in-depth analysis, InvestingPro offers numerous additional tips to guide investment decisions.
Investors and shareholders of Crew Energy looking to navigate this transition period can access a broader spectrum of insights and tips on InvestingPro, with more than ten additional tips available to help inform their investment strategy.
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