Wheels are in fast motion for Hamm’s Continental Resources takeover

Harold Hamm Launches $4.4 Billion Cash Offer to Take Continental Resources Private | Hart Energy


Soon, Continental Resources will be totally in the hands of billionaire founder Harold Hamm and his family. The Oklahoma City-based oil and gas company that he founded in the late 1960s will be private and no longer traded publicly.

On Monday, it was formally announced that Omega Acquisition, the newest company founded by Hamm and his family to take over Continental, commended a tender offer to acquire all of the outstanding shares of common stock other than those owned by Hamm and his family members. A filing was also made with the Securities and Exchange Commission.

Hamm and the rest of the Hamm Family collectively own approximately 83% of the outstanding shares. The offer totals $4.3 billion for Hamm and family but the leveraged buyout comes with a cost of $27 billion.

Hamm and his family were ranked No. 21 on the Forbes list of billionaires and had a value of $20.7 billion. Once the private takeover is complete, Hamm’s standing on the world’s list of billionaires will change and he will move down in ranking—not that he likely will care.

As announced last week, Hamm’s offer was $74.28 per share in cash, without interest and subject to deduction for any required withholding taxes.

This week’s announcement stated the offer was made pursuant to the previously announced agreement and plan of merger dated as of Oct 16, 2022 between Continental and Omega Acquisition. The offer will expire at one minute after 11:59 p.m., New York City time on Nov. 21 of this year.

OK Energy Today reported a filing with the SEC last week indicated the consummation of the offer and the merger is subject to certain conditions set forth in the merger agreement. If they are not met by Dec. 31 of this year, the deal could be called off. However, if the consummation is reached, the company will be wholly owned by the Hamm Family. As part of the requirement to consummate the agreement, Hamm will have to make an initial payment of $274 million to the company.

Oil Billionaire Harold Hamm Proposes To Take Continental Resources Private | OilPrice.com

“As a result of the Merger, the Shares will cease to be listed on the New York Stock Exchange and will subsequently be deregistered under the Securities Exchange Act of 1934, as amended,” declared the Monday announcement.

As explained, the merger agreement included a Non-Tender and Support Agreement made by both Continental and the Hamm Family. In other words, the Hamm Family agreed not to “tender any of the Shares beneficially owned by such person into the Offer and agreed to the treatment of such person’s Shares pursuant to the Merger Agreement.”

The Hamm Family also agreed not to vote their Shares in favor of any alternative acquisition proposals involving the Company other than those contemplated by the Merger Agreement, including the Merger and the Offer, and to take certain other actions to support the Merger and the Offer. Mr. Hamm and the rest of the Hamm Family collectively own approximately 83% of the outstanding Shares.

Continental’s Board of Directors announced the agreement was reached Oct. 16 after determination that the merger agreement and Hamm’s offer were “fair to and in the best interests of the company’s shareholders.”

Still nothing publicly announced whether the largest minority shareholder in Continental might file a legal challenge to Hamm’s takeover.

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Bill Smead, founder and chairman of Phoenix, Arizona-based Smead Capital Management had initially said he was considering such a legal move. He owns about 2% of Continental and had said at one time he felt Hamm’s offer should have been closer to $90 to $100 a share.

Smead was quoted last week as say he understood Hamm’s desire to return the company to being privately operated.

 “Because he always wants to drill, he wants to get out of the public markets to do that drilling because he doesn’t want to have to sit there and defend himself to a bunch of Kool-Aid ESG (Environmental and Social Governance) drinkers.”

In his initial reaction during a phone interview with Bloomberg, Smead said, “It looks like the special committee wasn’t interested in necessarily the value of the business. They were interested in ‘what could we do that might please the process for Harold’ because the things that were communicated to use never took place.”

Smead hasn’t commented publicly since his initial reaction to the deal.

Source: PR Newswire