Takeover talk fires up Petrohawk shares, options

CHICAGO (Reuters) - Shares in Petrohawk Energy Corp (HK.N) hit all-time highs on Friday and its option volume soared on speculation that the oil and natural gas producer was a takeover target.

The stock was 5.8 percent higher at $21.20 in late New York Stock Exchange trade, a penny shy of its fresh record high.

That was accompanied by a surge in option turnover as roughly 17,000 calls changed hands compared with only 658 puts, five times the normal combined volume, according to option analytics firm Trade Alert. Sentiment was 67 percent bullish, data from Trade Alert showed.

"The driver for today's run is a rumor that Chesapeake Energy will make a bid for Petrohawk and that such a bid could be as high as $35 a share," said Jon Najarian, founder of optionmonster.com in Chicago.

Natural gas producer Chesapeake Energy Corp (CHK.N), which saw its shares rise 1.4 percent on Friday, and Houston-based Petrohawk said they do not comment on market rumors.

In the last two days there has been a pick-up in Petrohawk options surrounding unsubstantiated takeover rumors in the marketplace, Susquehanna Financial Group said in a note to clients on Friday.

Najarian noted traders have been aggressively buying May and June $22.50 calls, allowing them to buy Petrohawk shares at $22.50 a piece within the next few months.

The stock needs to trade at $23.75 or higher in order for those bets to pay off, he said.

Susquehanna's market intelligence team also saw buyers of the April $22.50 calls on Thursday and said investors had rolled their long call positions to the July $22.50 strike up from the June $20 call strike.

The May $22.50 calls on Friday had volume of more than 6,400 contracts, far exceeding that strike's previous contracts outstanding of only 87 contracts, an indication that these buyers are opening new positions, Najarian said.

(Reporting by Doris Frankel, Additional reporting by Michael Erman in New York; Editing by Braden Reddall)