(Adds details, background, analyst comments; updates shares)
By Shubhankar Chakravorty
Aug 19 Activist investor Orange Capital LLC said
it would ask oil and gas company Bellatrix Exploration Ltd
to consider strategic alternatives after it became the
largest shareholder in the Canadian company.
Bellatrix's shares rose as much as 10 percent, valuing the
company at $1.67 billion, after New York-based Orange Capital
reported a 5.3 percent stake in the company on Tuesday.
The hedge fund also wants to discuss about the size and
composition of Bellatrix board and a possible IPO or sale of the
company's midstream assets, a regulatory filing showed on
Orange Capital said Bellatrix's valuation was well below its
intermediate industry peers in the Canadian exploration and
"The discount that they speak on would be on a cash flow
multiple basis they're trading at discount to some other
companies in their peer group," Clarus Securities analyst Daniel
Bellatrix's shares have fallen about 11 percent in the past
three months up to Monday's close, while the S&P TSX Oil & Gas
Exploration & Production Index has fallen only
The stock is trading about three times above its intrinsic
value - a metric that takes into account analysts' growth
estimates over the next 15 years, according to Thomson Reuters
Bellatrix said earlier this month sales volume rose 64
percent to 36,342 barrels of oil equivalent per day (boed) in
the second quarter. It expects average daily production of about
41,000 boed for the full year.
"I think (Bellatrix) would cooperate with what their
significant shareholder wants to do," Choi said.
Fiera Capital Corp is the second-largest shareholder of
Bellatrix with a 5.2 percent stake.
When contacted by Reuters, Troy Winsor, a representative of
Bellatrix declined to comment on Orange Capital's move.
Calgary, Alberta-based Bellatrix's shares were trading at
C$8.69 in afternoon trading on the Toronto Stock Exchange.
Bellatrix, with four "strong buy" and 10 "buy" rating, has a
median price target of C$12.50 on its stock.
(Reporting By Shubhankar Chakravorty in Bangalore; Editing by