Two years of maneuvering to enhance shareholder value at Kerr-McGee (KMG:NYSE - news - research - Cramer's Take) found the bull's-eye Friday when the company agreed to be acquired by Anadarko (APC:NYSE - news - research - Cramer's Take) at a 40% premium to its market value.
Anadarko will pay $70.50 a share in cash for Kerr-McGee, or about $16 billion. Kerr-McGee's stock closed Thursday at $50.30 and surged $18.68, or 37%, to $68.98 in premarket trading Friday. As of Thursday's close, Kerr-McGee's market capitalization was about $11.4 billion, while Anadarko's was $22.2 billion.
Anadarko also announced an agreement Friday to acquire Western Gas Resources (WGR:NYSE - news - research - Cramer's Take) for $61 a share cash, or $4.7 billion. Western Gas closed at $40.91 Thursday and was up $18.09, or 44.2%, to $59 early Friday.
Why do big mergers and acquisitions are always done at the top? Most of these kinds of things are based on optimism and soon the sector starts its move down. The casino sector was on fire some time ago and then a big ticket merger was announced by MGM and since then the sector just stopped going up. So you can safely kiss your Anadarko Petroleum Corporation,(Public, NYSE:APC) stock a goodbye.
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