ExxonMobil (XOM) Stock Down on InterOil Purchase

ExxonMobil (XOM) stock is slipping in afternoon trading after the company announced it will buy InterOil (IOC) for more than $2.5 billion.
By Annie Palmer ,

NEW YORK (TheStreet) -- Shares of ExxonMobil (XOM) - Get Report are slipping by 0.34% to $93.61 on Thursday afternoon, as the Irving, TX-based oil and gas producer announced it will acquire the Papua New Guinea-based oil business InterOil (IOC) for more than $2.5 billion. 

Exxon Mobil agreed to pay $45 per share, plus an extra payment of $7.07 per share in cash based on the resource size of Elk-Antelope, one of Asia's biggest undeveloped gas fields, the company said in a statement. 

The deal must receive 66.67% shareholder approval in September in order to close that month.

"InterOil's resources will enhance ExxonMobil's already successful business in Papua New Guinea and bolster the company's strong position in liquefied natural gas," Exxon Mobil Corporation CEO Rex W. Tillerson said.

Previously, ExxonMobil was in a bidding war with Australia's Oil Search (OISHF) to purchase InterOil, until ExxonMobil outbid the company's $2.2 billion offer. 

ExxonMobil is slated to report fiscal 2016 second quarter earnings next Friday before markets open.

Shares of InterOil are up 0.22% to $49.06 in afternoon trading on Thursday. 

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:

We rate EXXON MOBIL CORP as a Hold with a ratings score of C. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, poor profit margins and weak operating cash flow.

You can view the full analysis from the report here: XOM

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