Murphy Sales Reviewed With Investors May Lag Third Point Target

Murphy Oil Corp. (MUR), the Arkansas-based petroleum company, said it’s “evaluating opportunities” after meeting with investors including Third Point LLC, which is calling for divestitures that it says could raise as much as $8.4 billion.

That may be an over-estimate of the assets’ values, William A. Featherston, a New York-based analyst for UBS Investment Research, wrote today in a note to clients. Several of the asset sales proposed by Third Point, including separation of the U.S. retail business and sale of its U.K. refinery, have been previously contemplated and delayed by Murphy, Featherston said.

Third Point and others made suggestions about the company’s holdings, El Dorado, Arkansas-based Murphy said today in a statement. Third Point, in a letter posted yesterday on its website, said Murphy may be worth $94 a share after selected divestitures.

The divestitures proposed by Third Point, which would also include Canadian natural gas fields and a stake in an oil-sands operation, would raise as little as $4.5 billion, and the $94 a share estimate presumes Murphy would trade above historic ratios to earnings, Featherston wrote.

Murphy shares rose 1.6 percent to $59.14 at 10:22 a.m. in New York, touching a six-month high for the second time in two days. They’ve risen 5.4 percent this year.

To contact the reporter on this story: Jim Polson in New York at jpolson@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net