SemGroup Shares Jumped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of SemGroup (NYS: SEMG) jumped as much as 20% today after the company received a buyout offer.

So what:Plains All American Pipeline LP (NYS: PAA) has made a $1 billion hostile takeover offer for SemGroup public after being rebuffed by the company in the past. The offer, made Oct. 6, was for $24 per share, a premium at the time but a discount to SemGroup's current price.

Now what: Buyouts in the pipeline industry are hot right now after Kinder Morgan (NYS: KMI) agreed to buy El Paso (NYS: EP) in a $21 billion deal announced last week. Since SemGroup has brushed off buyout offers before, it's still unclear whether this will end in a buyout or whether SemGroup will remain an independent company. With shares trading nearly $4 higher than the most recent offer price, I would at least be inclined to take some profit off the table in case a higher offer doesn't materialize.

Interested in more info on SemGroup? Add it to your watchlist byclicking here.

At the time thisarticle was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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