SandRidge Energy confirmed Wednesday that it had reached an agreement to buy Bonanza Creek Energy for $746 million.
The offer is $36 per share, a 17.4 percent premium over Bonanza’s closing price Tuesday. The deal includes $19.20 in cash and $16.80 in stock, which is subject to a collar based on the volume-weighted average price of SandRidge shares before the deal closes.
Both companies’ shareholders and regulators must approve the transaction, which is expected to close in the first quarter of 2018.
SandRidge management said the purchase enhances its portfolio by adding “drill-ready” properties in the Rockies’ DJ Basin.
Vinson & Elkins advised Oklahoma City-based SandRidge with a team led by corporate partners Steve Gill and Mark Kelly with assistance from corporate associates Justin Hunter, Nettie Downs, Ryan Martin, Maggie Webber and Ryan Rivera. All are in Houston. Kelly is also firm chairman.
Other V&E team members included tax partner John Lynch in Houston; executive compensation and benefits counsel Katherine Mull and associate Steven Oyler, both of Dallas; environmental associate Matthew Dobbins in Houston; finance associates Guy Gribov and Jason Blackmer of Houston; and corporate partner John Grand in Dallas.
SandRidge general counsel Phil Warman led the deal inhouse. He joined the company in 2010 after working at Spectra Energy Corp. as associate general counsel for matters involving the U.S. Securities & Exchange Commission and finance. Before Spectra, he was a corporate finance lawyer at V&E. He received his legal degree from the University of Texas School of Law.
Kirkland & Ellis assisted Denver-based Bonanza Creek with a team led by partners Doug Bacon, Andrew Calder and Kim Hicks, all of Houston.
Bonanza Creek’s general counsel is Cyrus “Skip” Marter, who has only been in the post for a little over a year. During the six months leading up to that time, he was seconded to Bonanza Creek while with Denver law firm Davis Graham & Stubbs.
Marter previously was general counsel at Forest Oil Corp. for nine years and headed the U.S. legal group at Canada’s Encana Corp. The University of Texas law graduate began his legal career in 1990 at the Houston law firm of Susman Godfrey and was a partner at the firm from 1996 to 2002.
Morgan Stanley’s Jonathan Cox in Houston provided financial advice to SandRidge along with Michael Johnson and Michael Harris in New York. Evercore’s Shaun Finnie in Houston assisted Bonanza Creek.
V&E’s Gill has been busy this past week, first closing EQT Corp.’s $6.7 billion purchase of Rice Energy on Monday (which had been railed against by activists for not creating enough value) and then signing up the SandRidge-Bonanza transaction.
Both SandRidge and Bonanza Creek, plagued by low commodity prices and high debt loads, filed for bankruptcy last year. SandRidge emerged in October 2016 and Bonanza Creek in April of this year. Kirkland worked on both bankruptcies.
Bonanza Creek had often been mentioned as a potential takeover target, with analysts mentioning Bill Barrett Corp. as a possible acquirer.