Vinson & Elkins is counseling Harold Hamm on his $25 billion bid to take Continental Resources private.
Intrepid Partners, led by former Barclays and Lehman Brothers banker Skip McGee, is serving as financial advisor.
V&E has long advised Continental Resources, most recently in March on its $250 million investment in Summit Carbon Solutions.
Hamm’s offer, for $70 a share, represents a 9 percent premium over Continental’s closing price yesterday, a premium of 11 percent over its volume weighted average price during the last 30 trading days and a 21 percent premium to the volume weighted average price of the common stock traded so far this year.
The Hamm family collectively owns about 83 percent of the total outstanding shares of common stock as of its last quarterly report filed with the Securities & Exchange Commission on May 4. So the family is offering to take over the 17 percent stake that’s in the public’s hands for $4.8 billion.
The board of directors will establish a special committee consisting of independent directors to consider Hamm’s proposal. In the case the special committee doesn’t recommend such a deal, the Hamm family intends to continue as long-term shareholders and are not interested in selling any of their stock or pursuing other strategic deals.
Sources said the committee hasn’t determined which bankers and lawyers it will be using yet.
The announcement is somewhat of a surprise given previous messaging of wanting to be a public company given access to capital markets, according to analysts at Tudor, Pickering Holt, but seems like a “reasonable deal” given the firm’s current price target of $77 per share.
But Hamm said in a letter to company employees that times have changed in the public market, particularly since the COVID pandemic.
“We have determined that the opportunity today is with private companies who have the freedom to operate and aren’t limited by public markets, similar to the way that we operated approximately 15 years ago,” he said.