Canaccord Genuity reiterated its BUY rating and C$14.50 target share price for Birchcliff (BIR:TSX) after the exploration and production company announced that it had initiated a formal sales process. Canaccord's target price is based on a 1.2 times multiple of CNAV and a 10 times multiple of 2012 estimated EV/DACF.

Birchcliff started its sale process as a result of attracting unsolicited interest from potential buyers of the firm. Canaccord provided its opinion that Birchcliff's land assets could make it an appealing acquisition target for a potential buyer.

The company's stock is currently trading at a 7.8 times multiple of 2012 estimated EV/DACF. Since the stock is valued at a premium, Canaccord speculates that larger foreign companies who are looking to acquire material resources and infrastructure located in Western Canada could be the sources of unsolicited interest.

Birchcliff's stock opened at C$11.71 on October 5 and hit a 52-week high/low of C$14.50 and C$7.90, respectively.