Merger of SBOW into CRGY will close by July 31st
Posted: Sun Jul 28, 2024 12:14 pm
Bottomline: The merger will close before July 31st and every SilverBow shareholder that wanted to be paid in cash or a combination of cash and Crescent Energy common stock will get what they asked for because the total cash to be paid out is below the $400 million cap. If my calculations are correct, Crescent Energy will need to issue 50,551,650 shares to the SilverBow shareholders that elected to take all stock or a mix of cash & stock for their SBOW shares. This means that that Crescent Energy should have approximately 156 million A shares outstanding when the merger closes. Crescent Energy also had 71,948,000 B shares outstanding at the end of March. B Shares will eventually be turned into A shares, so my per share valuation is based on Operating Cash Flow / A+B shares.
---------------------------------
HOUSTON, July 25, 2024--(BUSINESS WIRE)--Crescent Energy Company (NYSE: CRGY) ("Crescent") and SilverBow Resources, Inc. (NYSE: SBOW) ("SilverBow") jointly announced today the preliminary results of the elections made by holders of SilverBow common stock regarding the form of merger consideration to be received in connection with Crescent’s pending acquisition of SilverBow (the "Transaction").
As further described in (a) the Agreement and Plan of Merger, dated as of May 15, 2024, by and among SilverBow, Crescent and the other parties thereto (the "Merger Agreement"), (b) the definitive joint proxy statement of Crescent and SilverBow and a prospectus of Crescent (the "Proxy Statement/Prospectus"), included in the registration statement on Form S-4 filed by Crescent with Securities and Exchange Commission, which was declared effective on June 27, 2024 (the "Registration Statement") and (c) the election form and accompanying election materials, each share of SilverBow common stock outstanding immediately prior to the Initial Merger Effective Time (as defined in the Merger Agreement) will, at the election of the holder of such share of SilverBow common stock, be converted into the right to receive (i) 3.125 shares of Crescent Class A common stock (the "Stock Election Consideration"), (ii) $15.31 in cash without interest (and subject to any withholding taxes required by applicable law) and 1.866 shares of Crescent Class A common stock (the "Mixed Election Consideration"), or (iii) $38.00 in cash without interest (and subject to any withholding taxes required by applicable law) (the "Cash Election Consideration"), subject to an aggregate cap of $400,000,000 on the total cash consideration payable for SilverBow common stock.
Based on available information as of the election deadline of 5:00 p.m. Central Time on July 24, 2024, the preliminary merger consideration election results are as follows:
Holders of approximately 44.95% of the outstanding shares of SilverBow common stock, or 11,479,832 shares, elected to receive the Stock Election Consideration. Pursuant to the terms of the Merger Agreement, this amount includes holders of SilverBow common stock who failed to properly make an election prior to the election deadline and are deemed to have elected to receive the Stock Election Consideration.
Holders of approximately 30.40% of the outstanding shares of SilverBow common stock, or 7,764,646 shares, elected to receive the Mixed Election Consideration.
Holders of approximately 24.65% of the outstanding shares of SilverBow common stock, or 6,295,137 shares, elected to receive the Cash Election Consideration.
As a result of these elections, it is estimated that approximately $358,091,936 in cash will be paid to holders of SilverBow common stock as part of the merger consideration (excluding the cash consideration payable in connection with the cancellation and conversion of the Company RSU Awards, Company PSU Awards and Company Options (each as defined in the Merger Agreement)), which is below the maximum total cash consideration payable for SilverBow common stock of $400,000,000 as set forth in the Merger Agreement.
The foregoing results are preliminary only, and final certified results are not expected to be available until shortly before closing. After the final results of the election process are determined, the final merger consideration, and the allocation of the merger consideration, will be calculated in accordance with the terms of the Merger Agreement. No fractional shares of Crescent Class A common stock will be issued in the merger, and holders of SilverBow common stock will receive cash in lieu of any fractional shares of Crescent Class A common stock.
A more detailed description of the merger consideration and the proration procedures applicable to elections is contained in the Proxy Statement/Prospectus. SilverBow stockholders should carefully read the Proxy Statement/Prospectus in its entirety. Copies of the Proxy Statement/Prospectus may be obtained free of charge by following the instructions below, under "Important Additional Information About the Transaction."
About Crescent Energy Company
Crescent is a differentiated U.S. energy company committed to delivering value for shareholders through a disciplined growth through acquisition strategy and consistent return of capital. Crescent’s portfolio of low-decline, cash-flow oriented assets comprises both mid-cycle unconventional and conventional assets with a long reserve life and deep inventory of high-return development locations in the Eagle Ford and Uinta basins. Crescent’s leadership is an experienced team of investment, financial and industry professionals that combines proven investment and operating expertise. For more than a decade, Crescent and its predecessors have executed on a consistent strategy focused on cash flow, risk management and returns. For additional information, please visit www.crescentenergyco.com.
About SilverBow Resources
SilverBow Resources, Inc. is a Houston-based energy company actively engaged in the exploration, development, and production of oil and gas in the Eagle Ford Shale and Austin Chalk in South Texas. With over 30 years of history operating in South Texas, SilverBow possesses a significant understanding of regional reservoirs which it leverages to assemble high quality drilling inventory while continuously enhancing its operations to maximize returns on capital invested. For more information, please visit www.sbow.com.
---------------------------------
HOUSTON, July 25, 2024--(BUSINESS WIRE)--Crescent Energy Company (NYSE: CRGY) ("Crescent") and SilverBow Resources, Inc. (NYSE: SBOW) ("SilverBow") jointly announced today the preliminary results of the elections made by holders of SilverBow common stock regarding the form of merger consideration to be received in connection with Crescent’s pending acquisition of SilverBow (the "Transaction").
As further described in (a) the Agreement and Plan of Merger, dated as of May 15, 2024, by and among SilverBow, Crescent and the other parties thereto (the "Merger Agreement"), (b) the definitive joint proxy statement of Crescent and SilverBow and a prospectus of Crescent (the "Proxy Statement/Prospectus"), included in the registration statement on Form S-4 filed by Crescent with Securities and Exchange Commission, which was declared effective on June 27, 2024 (the "Registration Statement") and (c) the election form and accompanying election materials, each share of SilverBow common stock outstanding immediately prior to the Initial Merger Effective Time (as defined in the Merger Agreement) will, at the election of the holder of such share of SilverBow common stock, be converted into the right to receive (i) 3.125 shares of Crescent Class A common stock (the "Stock Election Consideration"), (ii) $15.31 in cash without interest (and subject to any withholding taxes required by applicable law) and 1.866 shares of Crescent Class A common stock (the "Mixed Election Consideration"), or (iii) $38.00 in cash without interest (and subject to any withholding taxes required by applicable law) (the "Cash Election Consideration"), subject to an aggregate cap of $400,000,000 on the total cash consideration payable for SilverBow common stock.
Based on available information as of the election deadline of 5:00 p.m. Central Time on July 24, 2024, the preliminary merger consideration election results are as follows:
Holders of approximately 44.95% of the outstanding shares of SilverBow common stock, or 11,479,832 shares, elected to receive the Stock Election Consideration. Pursuant to the terms of the Merger Agreement, this amount includes holders of SilverBow common stock who failed to properly make an election prior to the election deadline and are deemed to have elected to receive the Stock Election Consideration.
Holders of approximately 30.40% of the outstanding shares of SilverBow common stock, or 7,764,646 shares, elected to receive the Mixed Election Consideration.
Holders of approximately 24.65% of the outstanding shares of SilverBow common stock, or 6,295,137 shares, elected to receive the Cash Election Consideration.
As a result of these elections, it is estimated that approximately $358,091,936 in cash will be paid to holders of SilverBow common stock as part of the merger consideration (excluding the cash consideration payable in connection with the cancellation and conversion of the Company RSU Awards, Company PSU Awards and Company Options (each as defined in the Merger Agreement)), which is below the maximum total cash consideration payable for SilverBow common stock of $400,000,000 as set forth in the Merger Agreement.
The foregoing results are preliminary only, and final certified results are not expected to be available until shortly before closing. After the final results of the election process are determined, the final merger consideration, and the allocation of the merger consideration, will be calculated in accordance with the terms of the Merger Agreement. No fractional shares of Crescent Class A common stock will be issued in the merger, and holders of SilverBow common stock will receive cash in lieu of any fractional shares of Crescent Class A common stock.
A more detailed description of the merger consideration and the proration procedures applicable to elections is contained in the Proxy Statement/Prospectus. SilverBow stockholders should carefully read the Proxy Statement/Prospectus in its entirety. Copies of the Proxy Statement/Prospectus may be obtained free of charge by following the instructions below, under "Important Additional Information About the Transaction."
About Crescent Energy Company
Crescent is a differentiated U.S. energy company committed to delivering value for shareholders through a disciplined growth through acquisition strategy and consistent return of capital. Crescent’s portfolio of low-decline, cash-flow oriented assets comprises both mid-cycle unconventional and conventional assets with a long reserve life and deep inventory of high-return development locations in the Eagle Ford and Uinta basins. Crescent’s leadership is an experienced team of investment, financial and industry professionals that combines proven investment and operating expertise. For more than a decade, Crescent and its predecessors have executed on a consistent strategy focused on cash flow, risk management and returns. For additional information, please visit www.crescentenergyco.com.
About SilverBow Resources
SilverBow Resources, Inc. is a Houston-based energy company actively engaged in the exploration, development, and production of oil and gas in the Eagle Ford Shale and Austin Chalk in South Texas. With over 30 years of history operating in South Texas, SilverBow possesses a significant understanding of regional reservoirs which it leverages to assemble high quality drilling inventory while continuously enhancing its operations to maximize returns on capital invested. For more information, please visit www.sbow.com.