Kimmeridge Energy makes offer to buy SBOW - Mar 13
Posted: Wed Mar 13, 2024 8:56 am
SilverBow rejected Kimmeridge's previous offer, but this one might have a chance. I'm sure there will be more negotiations.
March 13 (Reuters) - Kimmeridge Energy Management has submitted a new offer to acquire SilverBow Resources that values the U.S. oil and gas producer at close to $2.1 billion, including debt, according to people familiar with the matter.
The offer is a variation of previous unsuccessful bids for SilverBow that Kimmeridge has mounted over the last two years, the sources said. It would combine SilverBow with Kimmeridge's gas-producing assets in South Texas, which Kimmeridge values at about $1.4 billion, including debt, the sources added.
Under the proposal which Kimmeridge has made to SilverBow's board of directors, SilverBow shareholders would be rolling their equity into the combined company at a valuation of $34 per share, according to the sources. SilverBow shares ended trading on Tuesday at $31.72.
As well as contributing its South Texas assets, Kimmeridge would inject $500 million into the combined company to help pay down debt, the sources said. The investment firm would own a majority of the combined company, which would remain publicly listed, they added.
SilverBow said in an open letter to its shareholders on March 1 that it entertained Kimmeridge's previous overtures since July 2022 in vain, because Kimmeridge could not secure the necessary financing.
Kimmeridge's latest offer includes letters from financial institutions that have indicated they are confident they can bankroll the deal, the sources said.
A SilverBow spokesperson did not immediately respond to a request for comment on Kimmeridge's latest offer. A Kimmeridge spokesperson also did not immediately respond.
Kimmeridge is the largest shareholder in SilverBow with a 12.9% stake. Last month, Kimmeridge said it would nominate three directors to join SilverBow's board at its annual shareholder meeting. It said in November it backed calls by another large SilverBow shareholder, Riposte Capital, for board changes to address governance and performance concerns.
SilverBow's operations are in the Eagle Ford shale formation in south Texas, adjacent to Kimmeridge's assets. The tie-up would create one of the biggest energy producers solely focused on the Eagle Ford, which would leverage better economies of scale and whose location makes it favorable for supplying key export terminals for liquefied natural gas on the Gulf coast. (Reporting by David French in New York; Editing by Stephen Coates)
March 13 (Reuters) - Kimmeridge Energy Management has submitted a new offer to acquire SilverBow Resources that values the U.S. oil and gas producer at close to $2.1 billion, including debt, according to people familiar with the matter.
The offer is a variation of previous unsuccessful bids for SilverBow that Kimmeridge has mounted over the last two years, the sources said. It would combine SilverBow with Kimmeridge's gas-producing assets in South Texas, which Kimmeridge values at about $1.4 billion, including debt, the sources added.
Under the proposal which Kimmeridge has made to SilverBow's board of directors, SilverBow shareholders would be rolling their equity into the combined company at a valuation of $34 per share, according to the sources. SilverBow shares ended trading on Tuesday at $31.72.
As well as contributing its South Texas assets, Kimmeridge would inject $500 million into the combined company to help pay down debt, the sources said. The investment firm would own a majority of the combined company, which would remain publicly listed, they added.
SilverBow said in an open letter to its shareholders on March 1 that it entertained Kimmeridge's previous overtures since July 2022 in vain, because Kimmeridge could not secure the necessary financing.
Kimmeridge's latest offer includes letters from financial institutions that have indicated they are confident they can bankroll the deal, the sources said.
A SilverBow spokesperson did not immediately respond to a request for comment on Kimmeridge's latest offer. A Kimmeridge spokesperson also did not immediately respond.
Kimmeridge is the largest shareholder in SilverBow with a 12.9% stake. Last month, Kimmeridge said it would nominate three directors to join SilverBow's board at its annual shareholder meeting. It said in November it backed calls by another large SilverBow shareholder, Riposte Capital, for board changes to address governance and performance concerns.
SilverBow's operations are in the Eagle Ford shale formation in south Texas, adjacent to Kimmeridge's assets. The tie-up would create one of the biggest energy producers solely focused on the Eagle Ford, which would leverage better economies of scale and whose location makes it favorable for supplying key export terminals for liquefied natural gas on the Gulf coast. (Reporting by David French in New York; Editing by Stephen Coates)