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FINWIRES

ARC Resources Downgraded to Market Perform at BMO Following Shell's Acquisition Offer; Price Target at C$32.00

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-- BMO Capital Markets on Tuesday downgraded its rating on the shares of ARC Resources (ARX.TO) to market perform from outperform while raising its price target to C$32.00 price target from an undisclosed prior level, just under the US$32.80 per share Shell (SHEL) agreed to pay for the Western Canadian natural-gas producer in its C$22 billion acquisition offer on Monday.

"Another high-quality Canadian company is set to disappear with Shell plc's offer to acquire ARC Resources for roughly $22 billion. The implied transaction metrics screen better than recent Montney deals; however, we believe Shell is getting a good deal given ARX's size/scale and high-quality asset base. The transaction also appears to imply that Shell-operated LNG Canada Phase 2 could proceed, which could support a re-rating of other gas-weighted companies. We downgrade ARX to Market Perform but increase our target price to $32," analyst Randy Ollenberger noted..

(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www..com/contact-us)

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