Whiting Petroleum Corp (NYSE:WLL) recently announced about its plans to offer convertible senior notes worth $1.75 billion along with 35 million shares. The offering of convertible senior notes includes $1 billion (in notes) due in 2020 and also 2023-due $750 million.
This has raised the brows of investors and the market, which has started speculating if the company is up for sale of the entire business. However, an analyst at Wunderlich Securities Inc., Jason Wangler believes that the sale of stock announced by the company signalled otherwise. Wrangler opines that this is an indicator that any takeover of the company was not happening anytime in the time to come.
The Wall Street Journal had however reported in the beginning of this month that the plunging prices of crude might pave way for Whiting Petroleum to sell itself completely,
The Clear Indicator
According to the analyst, selling large number of shares like this indicates that Whiting did not get the desired price for sale. Wrangler, while talking to The Wall Street Journal, said that even though the company has the interest of selling itself wholly, but as of now, it seemed like the idea has been put off.
The December Deal Swallowed Whiting
In the market, it is often said that acquisitions and mergers may not always go in your favour. This is probably the scenario with Whiting. The company started witnessing a steep cut in the prices of oil, immediately after it acquired Kodiak Oil & Gas Corporation. The December deal, it seemed swallowed the entire company as it saddled with the additional debt worth over $2 billion.
Lately, Whiting announced that the net proceeds from the sale of shares shall be used for paying off a part or the entire outstanding amount as per its credit agreement. Rest of the amount shall be used by Whiting Petroleum Corp (NYSE:WLL) for its corporate purchases that happen on day to day basis.