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Continental Resources, Inc. (NYSE:CLR) today announced that it has entered into an Agreement and Plan of Merger (the "Merger Agreement") with Omega Acquisition, Inc., an Oklahoma corporation ("Merger Sub"), an entity that is owned by Continental's founder, Harold G. Hamm. Pursuant to the Merger Agreement, Merger Sub will commence a tender offer to purchase any and all of the outstanding shares of Continental's common stock at $74.28 per share (the "Offer Price"), other than (i) shares of common stock owned directly or indirectly by Mr. Hamm and the Hamm family and (ii) shares of common stock underlying unvested equity awards issued pursuant to Continental's long-term incentive plans (the "Rollover Shares"). Based on the shares outstanding as of October 12, 2022, the tender offer would be for approximately 58 million shares of common stock. The Offer Price includes $0.28 in lieu of Continental's anticipated dividend for the third quarter of 2022. Accordingly, and consistent with the Merger Agreement, Continental will not pay dividends between the signing and closing of the Transaction (as defined below).
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As soon as practicable after the consummation of the tender offer, Merger Sub will merge with and into Continental (the "Merger" and, together with the tender offer, the "Transaction"), with Continental continuing as the surviving corporation, wholly owned by the Hamm family. Each share of common stock outstanding immediately prior to the effective time of the Merger (other than the Rollover Shares, shares owned by holders that validly seek appraisal rights under Oklahoma law and certain other excluded shares specified in the Merger Agreement) will be converted into the right to receive the Offer Price, without interest. The Offer Price represents a 15% premium to the closing price of the Common Stock of $64.50 as of June 13, 2022, prior to the June 14, 2022 announcement of the Hamm family's initial offer to Continental.
There is no financing condition to the Transaction. It is anticipated that the Transaction will be financed using a combination of (i) the Company's cash on hand, (ii) borrowings under the Company's existing revolving credit facility and (iii) a new term loan facility to be entered into in connection with the closing of the Transaction.
Mr. Hamm currently serves as Chairman of Continental's Board of Directors. He and the rest of the Hamm family collectively own approximately 83% of Continental's common stock.
Continental's Board of Directors, acting on the unanimous recommendation of a special committee consisting solely of independent and disinterested directors, has approved the Merger Agreement and the transactions contemplated thereby and recommended that Continental's shareholders tender their shares of common stock pursuant to the tender offer.
The Transaction is governed by Section 1081.H of the General Corporation Act of the State of Oklahoma and does not require a vote by the Continental's shareholders. Subject to the satisfaction of customary closing conditions, the Transaction is currently expected to close prior to December 31, 2022.
Intrepid Partners, LLC is acting as financial advisor and Vinson & Elkins L.L.P. is acting as legal counsel to Mr. Hamm. Evercore is acting as financial advisor and Wachtell, Lipton, Rosen & Katz is acting as legal counsel to the special committee.
Posted In: CLR
