How The Exxon-XTO Deal Happened

Here’s an interesting report from Bloomberg on how Old School ties brought the two companies together (and how nice the old school in question was UT).

One question: Bloomberg continues to repeat what the financial press mainly reported yesterday, that the deal is valued at $31 billion based on yesterday’s stock price (now $29 billion after Exxon’s stock fell slightly). But buried down in, say, the 98th paragraph of some stories was the additional news that Exxon was also assuming XTO’s $10 billion in debt. Debt is not real money? Now that I think of it, isn’t debt more real than stock — that is, doesn’t it have to repaid in cold, hard cash? Of all the news services, as far as I can tell only the Australian and Mediawatch reported the deal’s true value at $41 billion.

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