Notable Mergers and Acquisitions of the Day 12/3: GE/CMCSA, DNR, GOK, ICOC/SHLM
- Comcast (NASDAQ: CMCSA) (NASDAQ: CMCSK) and General Electric (NYSE: GE) signed a definitive agreement to form a joint venture on NBC Universal that will be 51 percent owned by Comcast, 49 percent owned by GE and managed by Comcast.
Under the terms of the transaction, GE will contribute to the joint venture NBCU's businesses valued at $30 billion, including its cable networks, filmed entertainment, televised entertainment, theme parks, and unconsolidated investments, subject to $9.1 billion in debt to third party lenders. Comcast will contribute its cable networks including E!, Versus and the Golf Channel, its ten regional sports networks, and certain digital media properties, collectively valued at $7.25 billion, and make a payment to GE of approximately $6.5 billion of cash subject to certain adjustments based on various events between signing and closing.
Comcast Chairman and Chief Executive Officer Brian Roberts said, "This deal is a perfect fit for Comcast and will allow us to become a leader in the development and distribution of multiplatform 'anytime, anywhere' media that American consumers are demanding."
- Denbury Resources Inc. (NYSE: DNR) announced today that it has entered into an agreement with Wapiti Energy, LLC a Houston based privately-owned company to purchase a 95% working interest in the Conroe Field, a significant potential tertiary flood north of Houston, Texas, for approximately $430.7 million consisting of $256.4 million in cash and 11,620,000 shares of Denbury common stock. The number of shares of Denbury common stock to be issued in the acquisition is fixed and equate to a value of $174.3 million assuming a stock price of $15 per share. The transaction is expected to close on or before December 18, 2009. The Company plans to fund the cash portion of the purchase initially with bank debt, but expects to cover approximately $210 million of the cash portion of this purchase with the sale of its remaining Barnett Shale assets.
- Geokinetics Inc. (AMEX: GOK) and Petroleum Geo-Services today announced that they have signed a definitive agreement under which Geokinetics will acquire the onshore seismic data acquisition and multi-client data library business of PGS in a cash and stock transaction valued at approximately $210 million, on a cash free, debt free basis, which includes net working capital of $37.5 million. The final purchase price is subject to certain customary post-closing adjustments. The transaction is expected to close in the first quarter of 2010 and is subject to normal closing conditions and regulatory approvals; there is no financing condition.
Following the closing of the transaction, PGS will become Geokinetics' second-largest shareholder after Avista Capital Partners. The acquisition is expected to provide annual synergies in excess of $10 million, driven mainly by organizational streamlining and cost reductions. There may be additional synergies via cross-selling opportunities and additional opportunities for processing behind Geokinetics' expanded number of crews. Geokinetics expects to begin to capitalize on these synergies in mid-2010 as the Company starts to benefit from the integration of the two businesses.
Geokinetics has agreed to finance this acquisition through a combination of cash and common stock. At closing, Geokinetics will issue PGS approximately 2.15 million shares, which represents 19.9% of Geokinetics current number of shares outstanding prior to this issuance, valued for purposes of the transaction at $12.11 per share or $26.1 million. The remainder of the purchase price or $183.9 million will be paid in cash. The Company will have until February 15, 2010 to close the transaction.
The Company has received a bridge financing commitment from RBC Capital Markets Corporation and in addition, Geokinetics will also explore various capital markets financing transactions prior to closing.
In conjunction with the financing of this transaction, Geokinetics expects to repay the majority, if not all, of its existing outstanding debt including its revolving credit facility, capital leases and equipment financings. RBC Capital Markets Corporation served as Geokinetics' exclusive financial advisor for this transaction, while Pareto Securities served as advisor to PGS.
In connection with the transaction, the Company has amended its Preferred Stock to facilitate the financing of the transaction as follows. The Company's Series B-1 Preferred Stock has been amended to, among other things, extend the date that its holders may call for mandatory redemption and the date through which the Company can elect to pay dividends in kind to a date to be determined between December 2015 and March 31, 2016, with the exact date to be determined at the completion of the financing transactions mentioned above. In addition, the coupon on the Series B-1 Preferred Stock has been amended from 8% to 9 3/4% and the conversion price has been adjusted from $25 to $20, subject to certain restrictions. The Company's Series B-2 Preferred Stock will be exchanged for a new Redeemable Preferred Stock with no common stock conversion feature. This redeemable preferred stock will have a coupon of approximately 12%, and will be redeemable at a date to be determined between December 2015 and March 31, 2016, with the exact date and coupon to be determined at the completion of the financing transactions mentioned above. Dividends will be paid in cash or, if the Company is restricted from paying such dividends, may accrue up to redemption. In addition, the Company will issue the holders of its Series B-2 preferred stock 750,000 shares of its common stock as consideration for the amendments above.
- ICO, Inc. (NASDAQ: ICOC) today announced the execution of a merger agreement with A. Schulman, Inc. (NASDAQ: SHLM).
Under the terms of the agreement, the total consideration is comprised of $105.0 million in cash and 5.1 million shares of A. Schulman common stock. ICO, Inc. shareholders will receive approximately $6.79 per share of ICO, Inc. stock, comprised of:
* (a) $3.67 in cash; and
* (b) $3.12 in A. Schulman stock (0.184 shares of A. Schulman stock valued at the closing price on December 2, 2009).
assuming the cash-out of all ICO, Inc. stock options at their "in the money" spread based on the December 2, 2009 closing price. After the merger closes, ICO, Inc. shareholders will own approximately 16% of the combined company.
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