By Lisa Kerner
Charlotte, N.C., April 30 - Stone Energy Corp. will acquire Bois d'Arc Energy, Inc. in a cash and stock deal valued at approximately $1.8 billion, the companies announced on Wednesday.
Under the terms of their definitive merger agreement, Bois d'Arc stockholders will receive $13.65 in cash and 0.165 of a share of Stone Energy common stock for each share of Bois d'Arc common stock.
Stone Energy said it plans to fund the transaction using existing cash on its balance sheet, borrowings from a proposed new $700 million credit facility underwritten by Bank of America, NA and the issuance of some 11.3 million shares of Stone Energy common stock.
David Welch, chief executive officer of Stone Energy, will lead the new company as CEO from Stone Energy's headquarters in Lafayette, La.
The companies expect the transaction to close in the third quarter of 2008.
Stone Energy stockholders will own 72% of the combined company, with Bois d'Arc stockholders owing the remaining 28%.
Both companies' boards of directors approved the merger and will recommend its stockholders do the same, according to a Bois d'Arc statement.
Bois d'Arc said Comstock Resources, Inc., with a 49% stake in the company, agreed to vote in favor of the merger. Gary Blackie, a Bois d'Arc director and the company's CEO, along with director and former CEO Wayne Laufer, entered into stockholder agreements to vote their respective 8% and 10% interests in favor of the deal.
"Stone Energy has the cash flow as well as the depth of personnel and the infrastructure in place to effectively capture the full value of Bois d'Arc's extensive prospect inventory," Blackie said in a company news release.
"Bois d'Arc is an outstanding fit with Stone given the complementary asset bases, strategies and skill sets of the two companies," Welch added.
Stone Energy expects the transaction to be accretive on a 2008 cash flow basis, with the combined company expected to generate "significant" free cash flow.
Scotia Waterous (USA) Inc. and Raymond James & Associates, Inc. advised Bois d'Arc. Raymond James also provided a fairness opinion to the Bois d'Arc board. Stone Energy was advised by Tudor, Pickering, Holt & Co., which also provided a fairness opinion.
Bois d'Arc Energy, based in Houston, and Stone Energy are independent oil and natural gas exploration companies.
| Acquirer: | Stone Energy Corp.
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| Target: | Bois d'Arc Energy, Inc.
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| Announcement date: | April 30
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| Transaction total: | $1.8 billion
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| Price per share: | $13.65 in cash and 0.165 of a Stone Energy share
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| Expected closing: | Third quarter of 2008
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| Stock price for acquirer: | NYSE: SGY: $67.85 on April 29
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| Stock price of target: | NYSE: BDE: $25.98 on April 29
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