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TOO

Teekay Offshore Partners

$1.11

0.005 (0.45%)

, BBU

Brookfield Business Partners

$37.63

-0.43 (-1.13%)

05:36
05/24/19
05/24
05:36
05/24/19
05:36

JDP finds support from other Teekay Offshore holders to oppose Brookfield deal

On May 17, Brookfield Business Partners (BBU) published a letter requesting that the board of Teekay Offshore Partners LP (TOO) evaluate an offer to acquire the remaining publicly traded units of TOO for $1.05 per unit, an all-time low. Teekay Offshore is 73% owned by Brookfield Business Partners. JDP is an investor in Teekay Offshore and has gathered endorsements from a significant number of other funds and individual minority unit holders to respond to BBU's public letter. "Since BBU became TOO's financial sponsor, the company has benefited enormously from BBU's significant capital investment and board leadership. In 2018, Adjusted EBITDA increased ~50% over last year and the Leverage Ratio has improved ~38% in the same period. Further, management recently executed a refinancing of over 30% of its debt structure at highly accretive rates and terms with an expanded banking group. JDP believes TOO is worth at least $4 per unit today based on a cash flow analysis and peer comparisons. TOO's longer-term valuation is further underpinned by its large $5.4 billion charter backlog with investment grade counterparties, unique duopolistic market position in its shuttle tanker fleet, high-spec FPSOs, much improved balance sheet profile, and an "improved offshore market" according to its CEO Ingvild Saether on April 30th, 2019. It is our opinion that the reason for the disconnect between the depressed stock price and fundamental value has been very poor investor relations and confusion among the public unit holders regarding BBU's continued commitment to respect minority investor interests. JDP and the investors listed in the response letter feel betrayed that BBU CEO Cyrus Madon would attempt to squeeze out minority unit holders at a price that is a 58% discount to the $2.50 per unit BBU initially paid for 60% of TOO in 2017. This low offer was made just 20 months after committing to "maximize shareholder value" in its 2017 Sponsor Presentation. Further, BBU based its offer on a recent distressed block trade transaction executed by Teekay (TK) that was forced by its own immediate refinancing pressures. JDP Managing Partner Jeremy Deal further commented, "We encourage Brookfield Asset Management (BAM) CEO Bruce Flatt to reconsider this transaction as it would be incredibly harmful to the Brookfield reputation and brand."

TOO

Teekay Offshore Partners

$1.11

0.005 (0.45%)

BBU

Brookfield Business Partners

$37.63

-0.43 (-1.13%)

TK

Teekay Corp.

$3.86

-0.35 (-8.31%)

BAM

Brookfield

$46.55

-0.25 (-0.53%)

  • 19

    Jun

  • 08

    Aug

TOO Teekay Offshore Partners
$1.11

0.005 (0.45%)

01/22/19
MSCO
01/22/19
DOWNGRADE
MSCO
Underweight
Teekay Offshore Partners downgraded to Underweight from Equal Weight at Morgan Stanley
01/10/19
WELS
01/10/19
DOWNGRADE
WELS
Market Perform
Teekay Offshore Partners downgraded to Market Perform from Outperform at Wells Fargo
01/10/19
WELS
01/10/19
DOWNGRADE
Target $1.6
WELS
Market Perform
Teekay Offshore Partners downgraded to Market Perform at Wells Fargo
As previously reported, Wells Fargo analyst Michael Webber downgraded Teekay Offshore Partners to Market Perform from Outperform and lowered his price target on the shares to $1.60 from $3.25. While the analyst has previously viewed Teekay Offshore Partners as discount option value on a continued recovery in energy/crude, he believes the shift in macro dynamics simply limits the potential upside.
01/22/19
01/22/19
DOWNGRADE
Target $1

Underweight
Teekay Offshore Partners downgraded to Underweight at Morgan Stanley
As previously reported, Morgan Stanley analyst Fotis Giannakoulis downgraded Teekay Offshore Partners (TOO) to Underweight from Equal Weight, citing his lower oil price forecast and its impact on the Floating Production Storage and Offloading business. He sees lower oil prices putting pressure on its oil linked FPSO contracts and making redeployment of its assets more difficult, Giannakoulis tells investors. He cut his price target on Teekay Offshore Partners shares to $1 from $2.75 and also lowered his price target on Teekay Corporation (TK) to $3 from $6.50.
BBU Brookfield Business Partners
$37.63

-0.43 (-1.13%)

01/15/19
01/15/19
DOWNGRADE

Fly Intel: Top five analyst downgrades
Catch up on today's top five analyst downgrades with this list compiled by The Fly: 1. PG&E (PCG) downgraded to Sell from Buy at Argus with analyst Jacob Kilstein citing the company's announcement that it will declare bankruptcy based on the potential for $30B in liability costs related to its role in California wildfire, the lack of financing, and the absence of the state government intervention. 2. SL Green Realty (SLG) downgraded to Neutral from Buy at Goldman Sachs with analyst Andrew Rosivach saying he believes the market will value at a lower multiple than real estate ownership. 3. Atlassian (TEAM) and Yext (YEXT) were downgraded to Underweight from Equal Weight at Morgan Stanley while Oracle (ORCL), VMware (VMW), and Autodesk (ADSK) were downgraded to Equal Weight from Overweight. 4. Brookfield Business Partners (BBU) downgraded to Sector Perform at RBC Capital. 5. Edison International (EIX) downgraded to Underperform from Neutral at BofA/Merrill with analyst Julien Dumoulin-Smith citing the challenging operating environment in California following the PG&E (PCG) Chapter 11 filing. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here.
01/15/19
RBCM
01/15/19
DOWNGRADE
Target $42
RBCM
Sector Perform
Brookfield Business Partners cut to Sector Perform at RBC Capital on valuation
As reported earlier, RBC Capital analyst Jeoffrey Kwan downgraded Brookfield Business Partners to Sector Perform from Outperform and lowered his price target to $42 from $46. The analyst says that while the stock is an "attractive" investment over the longer term horizon, its 2018 outperformance relative to his coverage universe implies a total return that is now more in line with the average. Kwan also warns that the heightened market volatility could reduce Brookfield Business Partners' earnings visibility and thus the estimated values for its investments, recommending increased disclosures regarding their financial performance.
01/15/19
RBCM
01/15/19
DOWNGRADE
RBCM
Sector Perform
Brookfield Business Partners downgraded to Sector Perform at RBC Capital
05/13/19
FBCO
05/13/19
INITIATION
Target $42
FBCO
Neutral
Johnson Controls reinstated with a Neutral at Credit Suisse
Credit Suisse analyst John Walsh reinstated Johnson Controls (JCI) with a Neutral rating and a $42 price target, following the Power Solutions sale to Brookfield (BBU). The analyst cited tailwinds from energy efficiency/sustainability, improved free cash flow metrics, and margin expansion driven by incremental synergy/productivity gains in 2019/2020. However, he does not see meaningful upside to consensus estimates or relative valuation to implied IR ClimateCo, at this time.
TK Teekay Corp.
$3.86

-0.35 (-8.31%)

10/22/18
BOFA
10/22/18
INITIATION
Target $8
BOFA
Buy
Teekay Corp. initiated with a Buy at BofA/Merrill
BofA/Merrill analyst Melvin Shieh initiated Teekay Corp with a Buy and $8 price target. Shieh is bullish on Teekay's outlook saying he expects potential upside from secular growth of liquefied natural gas and petroleum gas, a recovery in product and crude tanker markets, and demand for energy commodities.
BAM Brookfield
$46.55

-0.25 (-0.53%)

03/14/19
WELS
03/14/19
NO CHANGE
Target $49
WELS
Market Perform
Oaktree Capital price target raised to $49 from $44 at Wells Fargo
Wells Fargo analyst Christopher Harris raised his price target for Oaktree Capital (OAK) to $49 form $44 after the company and Brookfield Asset Management (BAM) announced an agreement for Brookfield to acquire 62% of the Oaktree business. Upon completion of the $4.7B transaction, which is expected to close in Q3, Oaktree Capital would no longer be publicly traded. Harris reiterates a Market Perform rating on Oaktree Capital's shares.
03/18/19
BMOC
03/18/19
NO CHANGE
Target $13
BMOC
Market Perform
TerraForm Power price target raised to $13 on higher dividend at BMO Capital
BMO Capital analyst Ben Pham nudged his price target on TerraForm Power (TERP) to $13 from $12 in spite of its below-consensus Q4 adjusted EBITDA, saying the company's 6% dividend increase reflects the management's expectations for improved production and "better than expected" cost reductions in 2019. The analyst is keeping his Market Perform rating on the stock given its risk-adjusted relative return, but sees the company's cash flow generating business as stable and its sponsorship by Brookfield (BAM) as promising of new growth opportunities.
04/15/19
SBSH
04/15/19
UPGRADE
Target $35
SBSH
Neutral
Citi upgrades Franklin Resources, Artisan to Neutral from Sell
Citi analyst William Katz upgraded both Franklin Resources (BEN) and Artisan Partners (APAM) to Neutral from Sell. The analyst raised his price target to $35 from $28 for the former and to $25 from $20 for the latter. Ahead of the Q1 earnings season, however, the analyst favors the Alternatives. His top picks are Och-Ziff Capital (OZM), Brookfield (BAM) and Blackstone (BX). Katz, though, is "tactically less negative" on the Traditional asset managers.
04/25/19
FBCO
04/25/19
DOWNGRADE
Target $46
FBCO
Neutral
Brookfield Infrastructure downgraded to Neutral at Credit Suisse
As previously reported, Credit Suisse analyst Andrew Kuske downgraded Brookfield Infrastructure to Neutral from Outperform, with a $46 price target, given the more limited return to target and the balancing of funding needs. The analyst notes that the most interesting near-term issue facing Brookfield Infrastructure Partners is pending close for Brookfield's (BAM) Infrastructure Fund IV likely landing around $20B.

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AMRC

Ameresco

$19.78

-0.1 (-0.50%)

04:55
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HRB

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MSM

MSC Industrial

$76.89

-1.58 (-2.01%)

04:55
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FB

Facebook

$222.01

0.23 (0.10%)

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  • 22

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SPY

SPDR S&P 500 ETF Trust

$331.98

1.08 (0.33%)

, SPX

S&P 500

$0.00

(0.00%)

16:43
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SPDR S&P 500 ETF Trust

$331.98

1.08 (0.33%)

SPX

S&P 500

$0.00

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TSLA

Tesla

$510.34

-3.065 (-0.60%)

16:33
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  • 29

    Jan

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JPM

JPMorgan

$138.15

0.89 (0.65%)

, BNPQY

BNP Paribas

$0.00

(0.00%)

16:28
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JPM

JPMorgan

$138.15

0.89 (0.65%)

BNPQY

BNP Paribas

$0.00

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  • 05

    Feb

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  • 14

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BAC

Bank of America

$34.70

-0.03 (-0.09%)

16:25
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  • 26

    Feb

  • 15

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CEL

Cellcom Israel

$3.18

(0.00%)

16:16
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VRCA

Verrica Pharmaceuticals

$15.94

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  • 13

    Jul

SO

Southern Company

$67.25

1.08 (1.63%)

, XEL

Xcel Energy

$65.38

0.34 (0.52%)

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  • 30

    Jan

LIZI

Lizhi

$11.72

(0.00%)

, DNK

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$13.50

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TLGT

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$0.40

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  • 24

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AYTU

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$0.80

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  • 24

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DVA

DaVita

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  • 23

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TSM

TSMC

$58.58

-0.18 (-0.31%)

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KKR

KKR

$31.20

0.7 (2.30%)

, APO

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$50.35

1.26 (2.57%)

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BX

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CG

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HLNE

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  • 30

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08:56
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GOOG

Alphabet

$1,480.28

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, NFLX

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CMCSK

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$0.00

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