US-based shale producer Continental Resources has accepted an improved buyout offer from its founder Harold G Hamm and his family, which values the company at $27bn.
The related agreement and merger plan have been signed with Omega Acquisition, an Oklahoma-based entity owned by Hamm.
Under the terms of the revised offer, Hamm will offer $74.28 to a share for shareholders of Continental Resources for the stake that is not owned by him and the Hamm family trust.
The all-cash offer includes $0.28 to a share of Continental Resources’ expected dividend for the third quarter of fiscal 2022 (FY22).
Reuters reported that Hamm’s offer involves around 58 million Continental shares, which are estimated to be valued at around $4.3bn.
Hamm and his family currently own an 83% total stake in Continental Resources.
In a press statement, Continental said: “Continental’s Board of Directors, acting on the unanimous recommendation of a special committee consisting solely of independent and disinterested directors, has approved the Merger Agreement and the transactions contemplated thereby and recommended that Continental’s shareholders tender their shares of common stock pursuant to the tender offer.”
The company said the ‘go-private’ deal is subject to the meeting of customary conditions and is currently anticipated to close by the end of this year.
In June, Hamm made a non-binding proposal to acquire the remaining stake in Continental Resources for $70 to a share in cash.
Reuters noted that Smead Capital Management, which owns a stake of around 2% in Continental Resources, said that Hamm’s improved offer ‘undervalues’ Continental.
The news agency quoted Smead Capital president and portfolio manager Cole Smead as saying: “While we knew that Hamm would have to raise his price to get a deal done, this still undervalues the assets.”
Continental Resources currently has operations in Oklahoma, North Dakota, Montana, Texas and Wyoming.