Forest's stockholders approved the issuance of shares by Forest in the merger at a special meeting held in Denver earlier Tuesday. Under the terms of the merger agreement, Houston Exploration stockholders will receive total consideration equal to 0.84 shares of Forest common stock and $26.25 in cash for each outstanding share of Houston Exploration common stock. This represents $60.02 per share of consideration to be received by Houston Exploration stockholders based on the average closing price of Forest shares during the ten-day valuation period specified in the merger agreement. The mix of cash and stock consideration to be received by each Houston Exploration stockholder will be determined by stockholder elections, subject to proration. It is anticipated that the stock portion of the consideration will be tax free to Houston Exploration stockholders.
Approximately 18.5 million of Houston Exploration's total outstanding shares, or approximately 65.2 percent, voted for the approval of the transaction.
The transaction is anticipated to close on June 6, 2007, at which time Houston Exploration's stock will cease trading. Following the closing, Forest stockholders will own approximately 73 percent of the combined company, and Houston Exploration stockholders will own approximately 27 percent.
Lehman Brothers Inc. served as financial advisor to Houston Exploration, and Akin Gump Strauss Hauer & Feld LLP and Morris, Nichols, Arsht & Tunnell LLP served as legal advisors.
The Houston Exploration Co. is an independent natural gas and crude oil producer engaged in the development, exploitation, exploration and acquisition of natural gas and crude oil properties. The Company's operations are focused in South Texas, the Arkoma Basin, East Texas, and the Rocky Mountains.
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