Shareholders of Chesapeake Energy and Southwestern Energy still await for dates to be set for their elections on the planned merger of the two energy firms.
Last week’s announcement was an all-stock deal valued at $7.4 billion or $6.69 per share and one that would create a $24 billion enterprise. While leaders of the two companies gave their approval of the deal that would create the largest natural gas exploration and production company in the U.S., it still needs approval of shareholders in both firms.
As part of the contract signed by company executives, the shareholder votes have to be conducted: “Except where a Company Change of Recommendation has been made in compliance with Section 6.3, the Company Board shall recommend that the stockholders of the Company approve and adopt this Agreement at the Company Stockholders Meeting and the Joint Proxy Statement/Prospectus shall include the Company Board Recommendation.”
It further stated: “The Company shall ensure that all proxies solicited in connection with the Company Stockholders Meeting are solicited in compliance with any applicable Laws.”
Under the merger, the new company headquarters will stay in Oklahoma City and also maintain Southwestern’s headquarters in Spring, Texas near Houston.
A new name for the merged company will also be chosen but it has yet to be announced.
Shares in Chesapeake Energy fell more than 5% in Tuesday’s trading. The closing price, $78.66 per share, was down $4.21 or 5.08%.
Shares in Southwestern Energy Co. fell about the same amount—5.14%. The closing trade was $6.65 per share, down 36 cents.