Continental Gets Take Private Proposal from Hamm

Continental Resources Inc (NYSE: CLR) has announced the receipt of a “take private” proposal from the Hamm family.

The company noted that its board of directors has received a non-binding proposal letter, dated June 13, from Harold G. Hamm on behalf of himself, the Harold G. Hamm Trust and certain trusts established for the benefit of Hamm's family members to acquire, for cash, all of the outstanding shares of common stock of Continental, other than shares of common stock owned by the Hamm Family and shares of common stock underlying unvested equity awards issued pursuant to Continental’s long-term incentive plans.

Continental said the Hamm family’s proposal of $70 per share represents an approximate nine percent premium over Continental’s closing price on June 13, 2022, a premium of approximately 11 percent to its volume weighted average price during the last 30 trading days through June 13, 2022, and a 21 percent premium to the volume weighted average price of the common stock traded during 2022. Continental highlighted that the Hamm family collectively holds approximately 83 percent of the total outstanding shares of common stock.

“The board intends to establish a special committee consisting of independent directors of the board to consider the proposal,” Continental said in a statement posted on its website.

“The board expects that the special committee will retain independent advisors, including independent financial and legal advisors, to assist it in this process,” the company added.

“Continental cautions its shareholders and others considering trading in Continental’s securities that Continental has only recently received the Hamm family’s proposal and has not had an opportunity to carefully review and evaluate the proposal or make any decision with respect to Continental’s response to the proposal,” Continental continued.

The company also noted that the proposal constitutes only an indication of interest by the Hamm family and does not constitute a binding commitment with respect to the proposed transaction or any other transaction.

“No agreement, arrangement or understanding between Continental and the Hamm Family relating to any proposed transaction will be created unless definitive documentation is executed and delivered by the Hamm Family, Continental, and all other appropriate parties,” Continental said in the statement.

Continental’s stock price closed at $64.50 on June 13. At the time of writing on June 14, the company’s stock price had risen 14.17 percent to $73.64.

Hamm founded Continental in 1967 and is chairman of the board of directors. The company is a top 10 independent oil producer in the U.S. and a leader in America’s energy renaissance, according to Continental’s website. Based in Oklahoma City, Continental is the largest leaseholder and the largest producer in the Bakken play of North Dakota and Montana and has “significant” positions in the SCOOP and STACK plays of the Anadarko Basin of Oklahoma, as well as newly acquired positions in the Powder River Basin of Wyoming and Permian Basin of Texas, Continental’s website highlights.

Continental reported net income of $597.8 million, or $1.65 per diluted share, for the quarter ended March 31, 2022. Adjusted net income for the first quarter was $960 million, or $2.65 per diluted share (non-GAAP), net cash provided by operating activities was $1.50 billion and EBITDAX was $1.84 billion (non-GAAP), the company revealed in its first quarter results statement last month. Continental also highlighted that it had increased its quarterly dividend to $0.28 per share.

“Continental’s outstanding first quarter 2022 results underscore our commitment to both return of capital to shareholders and corporate disciplined return on capital employed,” Bill Berry, Continental’s president and CEO, said in the company’s first quarter results statement back in May.

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