Callon Petroleum (CPE) Update on merger with CRZO - Nov 14
Posted: Thu Nov 14, 2019 8:52 am
Callon Petroleum (CPE): Reducing the Premium Paid by CPE Shareholders from 25% to 7%: Positive
by John White at Roth Capital
CPE announced an amendment to the existing terms of their agreement for CPE to acquire Carrizo Oil & Gas, Inc. (CRZO-NC) in an all-stock transaction. The amendment reduces the premium paid by CPE shareholders from 25% to 7%. The amendment to the terms of its merger agreement with CPE that reduces the fixed exchange ratio of CPE shares to be received for each share of CRZO stock from 2.05 to 1.75.
This now equates to a revised 6.7% premium to CRZO shareholders versus the 25% premium agreed to in the original deal based on July 12 closing prices.
Paulson & Co., a 9.5% shareholder, and proxy advisory firm ISS had both previously come out against the transaction and the large premium was cited as a key reason by Paulson. This amendment likely proves favorable for the transaction to be approved.
The Boards of Directors of both CPE and CRZO have unanimously reaffirmed their support for the transaction as modified by the amendment to the merger agreement. In addition, each of the CRZO directors remains committed to vote his or her shares in favor of the transaction.
CPE and CRZO intend to file supplemental proxy materials with the SEC in the coming days. The companies continue to expect to close the transaction during the fourth quarter of 2019, subject to the approval of shareholders of both companies.
by John White at Roth Capital
CPE announced an amendment to the existing terms of their agreement for CPE to acquire Carrizo Oil & Gas, Inc. (CRZO-NC) in an all-stock transaction. The amendment reduces the premium paid by CPE shareholders from 25% to 7%. The amendment to the terms of its merger agreement with CPE that reduces the fixed exchange ratio of CPE shares to be received for each share of CRZO stock from 2.05 to 1.75.
This now equates to a revised 6.7% premium to CRZO shareholders versus the 25% premium agreed to in the original deal based on July 12 closing prices.
Paulson & Co., a 9.5% shareholder, and proxy advisory firm ISS had both previously come out against the transaction and the large premium was cited as a key reason by Paulson. This amendment likely proves favorable for the transaction to be approved.
The Boards of Directors of both CPE and CRZO have unanimously reaffirmed their support for the transaction as modified by the amendment to the merger agreement. In addition, each of the CRZO directors remains committed to vote his or her shares in favor of the transaction.
CPE and CRZO intend to file supplemental proxy materials with the SEC in the coming days. The companies continue to expect to close the transaction during the fourth quarter of 2019, subject to the approval of shareholders of both companies.