CHICAGO, June 21 Depressed shares of Chesapeake
Energy Corp are worth more than $50 a piece, and will
eventually top $100, the head of Southeastern Asset Management,
its top shareholder, said on Thursday.
Chesapeake is off 35 percent over the past year amid a
collapse in natural gas prices and a firestorm over Chief
Executive Aubrey McClendon's personal investments.
Chesapeake traded Thursday at $18.42, down 3.3 percent, but
Hawkins disagrees with that valuation.
He said he believes the stock is currently worth at least
$50 share. And eventually, he forecast it could top $100 a
share, if natural gas growth prospects materialize.
Hawkins made his remarks during a rare public appearance at
Morningstar Inc's annual investment conference in Chicago.
Chesapeake, the nation's No. 2 natural gas producer, has
been under fire from investors since Reuters reported that
McClendon had arranged for more than $1 billion in personal
financing from a lender who is also a big source of funding for
the company. The arrangement could put his interests at odds
with those of shareholders.
Earlier this month, Chesapeake shareholders rebuked
McClendon and the board, rejecting two directors running for
re-election in a reaction to a governance crisis that has
engulfed the company.
The shareholders' vote came just hours after Chesapeake said
it planned to sell pipeline and related assets to Global
Infrastructure Partners for more than $4 billion as part of
efforts to close a colossal $10 billion cash shortfall this
Chesapeake is replacing four current board members with
directors chosen by its top shareholders -- activist Carl Icahn
and Southeastern Asset Management. This would give
shareholder-backed directors a majority on the board.
At the Morningstar conference, Hawkins told reporters during
an intermission that Chesapeake is on track to sell assets and
create what he called a pristine balance sheet.