Before you get too caught up in the frenzy of who is next, think: does any company really LOOK like BG?
I am talking about the incredibly transformational deal in which Royal Dutch (RDS.A; RDS.B) buys BG at a 50% premium, to get worldwide reserves at what it hopes is a bargain price.
The charitable trust is a shareholder in Royal Dutch and it's been pretty miserable -- more miserable than most, because people perceive it as a high-cost operator of high-cost properties even as it has become a lower-cost operator of lower-cost properties. It just hasn't told the story right.
BG, as you will see from our note this morning, gives it lots of assets, plenty of LNG, which is going to be in demand in a huge way in Asia, and a chance to get much bigger in Brazil, as some would say it has the best assets there after the hobbled Petrobras (PBR).
The problem in the "who is next" game is that BG doesn't really look like anyone else. It's like if Conoco (COP) were to merge with Cheniere (LNG), the most aggressive natural gas liquefier, and then put itself up for sale.
It's not BP (BP).
People will buy BP because it seems like it is always for sale since Macondo, but it has sold off so much that I don't think it will be all that attractive to people.
People will also buy Anadarko (APC), Devon (DVN), the aforementioned Conoco as well as Cabot Oil and Gas (COG) and Range Resources (RRC). These all have big natural gas holdings.
The only problem with this kind of thinking is that you are betting on Exxon (XOM) or Chevron (CVX) to do the buying. Almost no one else is big enough.
And I don't think either of those companies sees real value right now.
So, get ready for some "buy everything first and hope someone else buys everything tomorrow."
Otherwise, if you have BG, cograts. My trust's consolation prize? Royal Dutch promised the dividend for a couple of more years -- which is the principal reason why anyone owns it anyway.
