Chesapeake Energy and Southwestern prepare for special shareholders meetings to vote on proposed merger


Chesapeake Energy has filed a proxy statement indicating it plans a special shareholders meeting to seek approval of its proposed $7.4 billion merger with Houston-based Southwestern Energy.

But the filing with the SEC did not declare a date or time for the meeting as it apparently is undecided because of a request by the Federal Trade Commission for more information about the merger that was announced in January. Word of the extended FTC investigation was made known last week in filings by the two companies.

“The Chesapeake Special Meeting will be held virtually on            , 2024 at       a.m., Central Time. Shareholders of record at the close of business on            , 2024 (the “Chesapeake Record Date”) are entitled to vote at the Chesapeake Special Meeting,’ stated the Chesapeake filing.

Chesapeake’s board of directors is recommending shareholders vote to support the merger.

The filing indicated that a similar shareholder meeting will be held by Southwestern Energy

“Approval of the Merger Proposal by the affirmative vote of holders of a majority of the outstanding shares of Southwestern Common Stock entitled to vote thereon is required to complete the Merger and the other transactions contemplated by the Merger Agreement,” stated the Chesapeake filing.
If approved by shareholders of Chesapeake and Southwestern Energy, each outstanding share of Southwestern Common Stock would be eligible to convert into Chesapeake common stock at the rate of 0.0867 share of Chesapeake stock.
The filing indicated that at the time of the announced merger in January, the exchange ratio represented about $6.69 in value for each outstanding share of Southwestern common stock, making the total merger consideration approximately $7.4 billion.
However, based on the closing price of Chesapeake common stock on April 10, the exchange ratio represented about $7.80 in value for each outstanding share of Southwestern common stock.
It is estimated that once the merger is complete, Chesapeake shareholders will hold about 60% and Southwestern shares the remaining 40% ownership in the resulting company.