SandRidge Energy Inc (NYSE:SD) has agreed with Bonanza Creek Energy Inc (NYSE:BCEI) to terminate its previously reported deal to buy Bonanza Creek. After consultation with company’s largest shareholders, it was evident that the firm would not get nod for the transaction at the intended special meeting. After extensive consideration, the decision was totally permitted by the firm’s Board of Directors and a deal was finalized with Bonanza Creek to mutually cancel the merger deal.
As part of the reported mutual termination deal, SandRidge will repay Bonanza Creek for transaction linked expenses up to $3.7 million. This sum is consistent with the firm’s obligation under the merger deal should the deal have been rejected by the firm’s stockholders at the special meeting.
Earlier in December, SandRidge Energy issued a letter to shareholders showcasing the advantages of the acquisition of Bonanza. The firm also reported that it will submit a registration statement on Form S-4, which will highlight the strategic rationale behind the intended deal and contain other vital details and analysis pertaining the deal. In addition, the firm has introduced a committed website with information pertaining the transaction.
In November 2017, the SandRidge management team and Board of Directors reported the acquisition of Bonanza. This strategic prospect is immediately accretive and puts them to offer increased long-term shareholder value by offering development-ready and high-return projects to their Niobrara position. After a thorough and detailed evaluation of Bonanza Creek, they decided this deal to be in the best interests of their shareholders.
The acquisition of Bonanza offers high-return development and immediate cash flow opportunities that enable them to continue recording strong risk-adjusted returns while they delineate their growing assets. Their current resources in the Niobrara and Mid-Continent are in distinct stages of the development cycle.
In the last trading session, the stock price of SandRidge jumped more than 10% to close the day at $21.07.