Chesapeake Shunned by JPMorgan as Goldman Shows Interest – ValueWalk Premium

Chesapeake Shunned by JPMorgan as Goldman Shows Interest

Chesapeake Shunned by JPMorgan as Goldman Shows Interest

‘One man’s meat is another man’s poison,’ so goes the age-old byword. Although the proverb has some reasonable shred of truth, it doesn’t hold much meaning in some avenues- the competitive relationship between Goldman Sachs Group, Inc. (NYSE:GS) and JPMorgan Chase & Co. (NYSE:JPM) is a good example. This relationship bears no reservations for such adages.

In fact, the two closely placed competitors have been known to chase after similar deals since time in memorial. However, the big exception to this widely known unwritten rule streams in with the mere mention of Chesapeake Energy Corporation (NYSE:CHK).

JPMorgan Chase & Co. (NYSE:JPM) has refused to conduct business with the energy behemoth and Aubrey McClendon (the billionaire Chesapeake CEO who recently faced the axe in his capacity as chairman) for more than ten years, reports Bloomberg. On the contrary, Goldman Sachs has conducted business with McClendon in the past and is currently in the forefront with regard to conducting business with Chesapeake. Goldman Sachs recently played an instrumental role in the arrangement of a $4 billion loan for Chesapeake’s Oklahoma City based wing. In addition to that, it has assumed an advisory role in Chesapeake’s efforts to sell assets.

People who were familiar with the discussion shed some insight on the matter. According to them, one of the contributory factors to JPMorgan Chase & Co. (NYSE:JPM)'s refusal to conduct business with Chesapeake Energy Corporation (NYSE:CHK) revolves around Chesapeake’s fast growth and credit quality. These contributors however opted for anonymity and argued that the discussions were private.

While JPMorgan’s relationship with Chesapeake Energy Corporation (NYSE:CHK) continues to secure deeper anchorage in the rocky stretch that it calls home, Goldman Sachs continues to tighten bonds with the energy titan. As a matter of fact, Goldman Sachs relationship with Chesapeake dates back to at least 2005 when the bank gave a helping hand in a $262 million stock offering.


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