Shareholder Opposes SandRidge Acquistition—Calls it ‘reckless abandon’

SandRidge Energy’s recently-announced-plan to make a $746 million merger and takeover of Bonanza Creek Energy based in Denver, Colorado is being opposed by a stockholder in the Oklahoma City energy company.

Fir Tree Partners of New York announced its opposition this week with a statement, “Put simply, the proposed acquisition of Bonanza makes no economic or strategic sense.”

As OK Energy Today reported last week, the newly-combined company will operate more than 630,000 net acres focused in the Rockies and Mid-Continent.

Fir Tree Partners owns 8.2 percent of common stock in SandRidge
Energy and said it “strongly opposes the proposed acquisition.” It cited three reasons including the claim that SandRidge is one of the “most undervalued E & P companies operating in the United States.” It charged that the acquisition will “drain SandRidge of its entire cash balance, force a significant draw on its RBL facility and use the issuance of undervalued SandRidge equity to fund the nearly $750 million acquisition.”

Its second reason for opposition was what it called a “non-strategic deal” calling it a “surprise announcement” and claiming Bonanza’s DJ Basin assets in Colorado are not as good as quality.

Fir Tree cited a third reason in opposing the acquisition describing it as “Empire Building Again.” The firm felt that with zero net debt and 200,000 acres to exploit, it felt SandRidge was positioned to both return capital to shareholders and grow production.

“The proposed acquisition represents a complete reversal of management’s post-bankruptcy strategy and reminds us of SandRidge’s prior history when this same management team acquired disparate assets and added leverage with reckless abandon,” stated the company in its press release.