SandRidge Bows to Pressure—-Cancels Merger With Bonanza Creek Energy

It was short and sweet!  SandRidge Energy’s message of canceling its proposed $742 million merger with Bonanza Creek Energy of Denver, Colorado.

The reason? Too much opposition from Carl Icahn and another big investor, Fir Tree Energy in New York City. Icahn and his companies control 13.5 percent of SandRidge stock while Fir Tree has another 8.3 percent.

“After consultation with SandRidge’s largest shareholders, it became clear that the Company would not receive approval for the transaction at the planned special meeting,” read the SandRidge Energy statement. ” After careful consideration, the decision was unanimously approved by the Company’s Board of Directors and an agreement was reached with Bonanza Creek to mutually terminate the merger agreement.”

SandRidge said it reached a mutual termination agreement with Bonanza Creek Energy and agreed to reimburse the company to the tune of $3.7 million.

In a Dec. 11 letter to shareholders, SandRidge leaders defended the move after it was criticized by Icahn.

“The acquisition of Bonanza Creek provides immediate cash flow and high-return development opportunities that allow us to continue generating strong risk-adjusted returns while we delineate our emerging assets,” said the company in the letter.

As OK Energy Today reported in early December, Icahn was blunt in his criticism saying the acquisition “represents a new low in corporate governance.” He called it “complete travesty” and said the actions of the board “would make a totalitarian dictator blush.”

Fir Tree  Partners was equally adamant in its opposition, issuing a statement in November.

“We believe this proposed acquisition represents a complete about face by (SandRidge‘s) management on its post-bankruptcy strategy,” said the company. SandRidge filed for bankruptcy late last year while Bonanza Creek Energy had done the same earlier in 2016.

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