Harold Hamm to complete his private takeover of Continental Resources

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Billionaire Harold Hamm is getting his wish.

He and his family are taking back Continental Resources, the company he founded in the late 1960s, and making it privately owned. It’ll cost him $4.3 billion.

Continental Resources announced Monday it had entered into an agreement and plan of merger with Omega Acquisition, Inc., a firm owned by Harold Hamm. The announcement, also on file with the Securities Exchange Commission, indicated that pursuant to the merger agreement, Omega Acquisition would make a tender offer to purchase any and all of the outstanding shares of Continental’s common stock at $74.28 per share.

Continental shares closed Monday with a $5.92 gain or 8.68% to close at $74.14 per share.

The offer is better than the $70/share offer made by Hamm in June. It also represents a 15% premium to the closing price of June 13, the day before Hamm and his family revealed the initial proposal.

Based on the shares outstanding as of October 12, 2022, the tender offer would be for approximately 58 million shares of common stock. The Offer Price includes $0.28 in lieu of Continental’s anticipated dividend for the third quarter of 2022. Accordingly, and consistent with the Merger Agreement, Continental will not pay dividends between the signing and closing of the Transaction.

The announcement explained that as soon as “practicable” after the consummation of the tender offer, Omega Acquisition will merge with an into Continental with Continental continuing as the surviving corporation, “wholly owned by the Hamm family.”

Each share of common stock outstanding immediately prior to the effective time of the Merger will be converted into the right to receive the Offer Price, without interest. The Offer Price represents a 15% premium to the closing price of the Common Stock of $64.50 as of June 13, 2022, prior to the June 14, 2022 announcement of the Hamm family’s initial offer to Continental.

Continental explained there is no financing condition to the merger and the transaction will be financed using a combination of the company’s cash on hand, borrowings under its existing revolving credit facility and a new term loan facility to be entered into in connection with the closing of the deal.

Harold Hamm, Energy Whisperer | Hart Energy

Hamm currently serves as Chairman of Continental’s Board of Directors. He and the rest of the Hamm family collectively own approximately 83% of Continental’s common stock.

Continental’s Board of Directors, acting on the unanimous recommendation of a special committee consisting solely of independent and disinterested directors, has approved the Merger Agreement and the transactions contemplated thereby and recommended that Continental’s shareholders tender their shares of common stock pursuant to the tender offer.

The Transaction is governed by Section 1081.H of the General Corporation Act of the State of Oklahoma and does not require a vote by the Continental’s shareholders. Subject to the satisfaction of customary closing conditions, the Transaction is currently expected to close prior to December 31, 2022.

Intrepid Partners, LLC is acting as financial advisor and Vinson & Elkins L.L.P. is acting as legal counsel to Mr. Hamm. Evercore is acting as financial advisor and Wachtell, Lipton, Rosen & Katz is acting as legal counsel to the special committee.

Source: press release