US E&P Co. Receives Take-Private Offer

Source: Streetwise Reports   06/15/2022

Continental Resources Inc. shares traded 15% higher to a new 52-week high after the oil and gas company announced it received a non-binding buyout proposal for $70 per share in cash from the firm’s largest shareholder Chairman Harold G. Hamm and the Hamm Family Trust.

Top-10 U.S. independent oil producer Continental Resources Inc. (CLR:NYSE), announced yesterday that in a letter addressed to the firm’s board of directors, the company’s Chairman Harold G. Hamm presented a non-binding cash offer to purchase all of the firm’s outstanding common shares not already owned by the Hamm Family.

The proposal outlined that a block of shareholders represented by Harold G. Hamm, the Hamm Family Trust, and other Hamm family members collectively referred to as the “Hamm Family,” expressed an interest in acquiring all of the company’s remaining outstanding shares for $70.00 per share in cash.

The report mentioned that the $70 per share offer represents about a 9% premium over Continental’s closing share price on June 13, 2022, and is 11% above the firm’s 30-day volume-weighted, average share price.

Harold G. Hamm noted in the letter to the Board that as was listed in the most recent Form 10-Q report filed with the SEC on May 4, 2022, the Hamm Family together currently owns approximately 299.7 million shares or around 83% of Continental’s common stock.

Continental Resources advised that its Board of Directors plans to establish a special committee comprised of independent board members to review and evaluate the offer. To maintain impartiality, it is anticipated that the committee will seek opinions from outside financial and legal advisors to assist in the review process.

The company stated that it is acknowledging receipt of the take-private offer but cautioned its shareholders that it has not yet had an opportunity to carefully review or make any kind of determination or recommendation regarding the proposal, which was just received in the letter dated yesterday, June 13, 2022. The firm reiterated that the proposal represents only an indication of interest by the Hamm Family and is not to be considered as any type of binding commitment to any transaction.

Hamm pointed out in his letter that the price offered equates to a 21% premium over the shares’ year-to-date volume-weighted average share price and commented that “it should be noted that Continental’s Common Stock has appreciated more than 82% during the last twelve months of trading.”

The proposal suggested that if a definitive agreement were to be reached it would be structured in the form of a tender offer for any and all shares of common stock and would not include any financing provisions.

Continental Resources is a major oil and natural gas producer headquartered in Oklahoma City, Okla. The top-10 U.S. independent producer claims that it is the largest leaseholder and producer in the Bakken Shale Play of North Dakota and Montana. The firm also owns significant holdings in the South Central Oklahoma Oil Province (SCOOP) and Sooner Trend Anadarko Canadian Kingfisher (STACK) areas in Oklahoma along with more recently acquired positions in Wyoming’s Powder River and Texas’ Permian basins.

Continental Resources began the day Tuesday with a market cap of around $23.4 billion with approximately 363.0 million shares outstanding and a short interest of about 1.7%. CLR shares opened 16% higher at $74.88 (+$10.38, +16.09%) over the previous day’s $64.50 closing price and reached a new 52-week high price of $75.49. The stock traded between $72.20 and $75.49 per share.

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