KAR – Macquarie rates the stock as Outperform

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Petrobras has withdrawn the appeal process for Bauna and Tartararuga Verde, effectively ending the sales process for the final negotiation rights. Despite the disappointment, Karoon’s management believes the assets will be back on the market in the future.

Macquarie had not attributed any value to the deal. The termination removes the possibility of the transaction being tied up in courts and allows the parties to progress with a court-approved methodology.

Outperform and $2.40 target retained.

Sector: Energy.

Target price is $2.40.Current Price is $1.50. Difference: $0.91 – (brackets indicate current price is over target). If KAR meets the Macquarie target it will return approximately 38% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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