Crescent Vitality Inc. agreed to purchase SilverBow Sources Inc., a rival oil and fuel producer that’s in a proxy battle with its largest shareholder, for $2.1 billion.
Every SilverBow share might be exchanged for 3.125 shares in Crescent Class A inventory, valued at $38.28 primarily based on Wednesday’s closing value. SilverBow holders could have the choice to obtain all or a portion of the proceeds in money at $38 a share, as much as a most of $400 million, in keeping with an announcement Thursday.
The worth of the inventory swap is about 18% above SilverBow’s closing value Wednesday. Bloomberg Information reported earlier that the businesses have been in superior talks.
- Advertisement -
The deal will give Crescent, which is backed and managed by KKR & Co., greater operations within the Eagle Ford basin, an oil-and-gas-rich stretch of shale in southeastern Texas. Crescent additionally has drilling operations within the Rocky Mountain area.
The settlement comes as SilverBow seeks to fend off a board problem from Kimmeridge Vitality Administration Co., which owns about 13% of its excellent shares. SilverBow has been feuding with Kimmeridge for the reason that asset supervisor started constructing a stake within the firm in 2022. Kimmeridge is looking for three seats on SilverBow’s board after dropping its newest takeover supply.
SilverBow, whose shares have gained 11% this 12 months, fell 0.6% Wednesday to $32.35, giving the Houston-based firm an market worth of about $826 million. Together with debt, SilverBow has an enterprise worth of about $1.9 billion.
Shares of Crescent fell 0.8% Wednesday to $12.25 for a market worth of about $2.2 billion.
Shareholders have been slated to vote by Tuesday on rival slates of board candidates from SilverBow and Kimmeridge. Proxy advisers Institutional Shareholder Providers and Glass Lewis each beneficial they again SilverBow’s nominees.
Over the previous three years, Crescent, which is 15% owned by KKR, has expanded by way of six transactions — 5 of them asset offers — valued at greater than $2 billion, in keeping with knowledge compiled by Bloomberg. Mixed with SilverBow, Crescent might be one of many largest operators within the Eagle Ford basin, competing with firms together with EOG Sources Inc. and ConocoPhillips.
Crescent’s monetary advisers on the acquisition are Jefferies LLC, as lead advisor, and Wells Fargo & Co., whereas BofA Securities Inc. and Evercore suggested SilverBow.
