Anadarko Petroleum Bounces Higher on Buyout Buzz

Posted Dec 30th 2010 11:00AM by Elizabeth Harrow
Filed under: Rumors, Options, Technical Analysis, Anadarko Petroleum (APC)

Shares of Anadarko Petroleum (APC) gapped higher right out of the gate Thursday morning, thanks to a report that BHP Billiton (BHP) may be eyeing the firm as a potential takeover target. According to the U.K.'s Daily Mail, BHP could be prepping an offer worth $90 per share to acquire Anadarko. However, neither company has issued a formal response to the speculation.

After jumping to a new annual high of $76.50 bright and early Thursday morning, APC is on pace to notch a weekly finish atop the $70 level for the first time since April 23. In fact, if the shares can maintain their positive momentum through Friday's close, the shares could stage their first weekly victory north of $75 since June 2008.

Options players have been quick to jump on thes news, with call volume skyrocketing to 23 times the expected level within the first hour of the session. By 10:30 a.m., APC had seen roughly 22,000 calls change hands.

Most active is the stock's January 2011 80 call, where more than 5,100 contracts were traded -- 52% at the ask price, suggesting they were most likely purchased. Open interest at this out-of-the-money strike currently totals just 3,948 contracts, so it looks like new bullish bets are being added here.

Elizabeth Harrow is a senior equities analyst and financial writer in the research department at Schaeffer's Investment Research.

Tags: acquisition, Anadarko Petroleum, APC, BHP, BHP Billiton, buyout, calls, featured, inthenews, options, takeover, technical analysis