Chesapeake Energy Corporation Commences Tender Offer to Acquire Bronco Drilling Company, Inc.
Chesapeake Energy Corporation (NYSE:CHK) announced today that it,
through a new wholly owned subsidiary, Nomac Acquisition, Inc., is
commencing a cash tender offer to purchase all outstanding shares of
common stock of Bronco Drilling Company, Inc. (NASDAQ: BRNC). On April
15, 2011, the companies previously announced a definitive agreement
whereby Chesapeake would acquire Bronco in a cash tender offer and
subsequent merger for approximately $315 million, including debt, net
working capital and outstanding warrants.
Upon the successful closing of the tender offer, Bronco stockholders
will receive $11.00 in cash for each share of Bronco common stock
tendered in the offer, without interest and less any required
withholding taxes. If more than 50 percent of the shares of Bronco
common stock on a fully diluted basis (but less than all of the
outstanding shares of Bronco common stock) are tendered, and all other
closing conditions are satisfied, any remaining shares not tendered will
be converted into the right to receive the same consideration in cash in
connection with a merger of Nomac Acquisition into Bronco. Following the
transaction, Bronco will be an indirect wholly owned subsidiary of
Chesapeake.
Today Chesapeake will file with the Securities and Exchange Commission
(SEC) a tender offer statement on Schedule TO that provides the terms of
the tender offer, and Bronco will file a solicitation/recommendation
statement on Schedule 14D-9 that includes the recommendation of Bronco's
board of directors that Bronco stockholders accept the tender offer and
tender their shares in the offer. As previously disclosed, the board of
directors of each of Bronco and Chesapeake has unanimously approved the
transaction.
The tender offer will expire at Midnight, New York City time, on May 23,
2011 unless extended in accordance with the merger agreement and the
applicable rules and regulations of the SEC. The closing of the tender
offer is conditioned upon the valid tender of a majority of the
outstanding shares of Bronco common stock on a fully diluted basis. As
previously disclosed, stockholders holding shares representing
approximately 32% of Bronco′s outstanding common stock have agreed,
among other things, to tender all of their shares in the tender offer.
In addition, Bronco′s directors and executive officers, who beneficially
own in the aggregate approximately 1.7% of the outstanding shares of
Bronco common stock (excluding unvested restricted shares), have
indicated that they intend to tender their shares in the tender offer.
The closing of the transaction is conditioned upon expiration or
termination of the applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act and other customary closing conditions.
The complete terms and conditions of the tender offer are set forth in
the Offer to Purchase and related Letter of Transmittal that are being
sent to holders of Bronco common stock. Copies of the Offer to Purchase
and Letter of Transmittal may be obtained from the information agent,
MacKenzie Partners, Inc., at (800) 322-2885 (toll-free) or (212)
929-5500 (collect).
Commercial Law Group, P.C. and Wachtell, Lipton, Rosen & Katz are acting
as legal advisors to Chesapeake.
About Chesapeake:
Chesapeake Energy Corporation is the second-largest producer of
natural gas and the most active driller of new wells in the U.S.Headquartered
in Oklahoma City, Chesapeake's operations are focused on discovering and
developing unconventional natural gas and oil fields onshore in the U.S.Chesapeake owns leading positions in the Barnett, Haynesville,
Marcellus and Bossier natural gas shale plays and in the Eagle Ford,
Granite Wash, Cleveland, Tonkawa, Mississippian, Wolfcamp, Bone Spring,
Avalon and Niobrara unconventional liquids plays.Chesapeake
has also vertically integrated its operations and owns substantial
midstream, compression, drilling and oilfield service assets.Further
information is available at www.chk.com
where Chesapeake routinely posts announcements, updates, events,
investor information and presentations and all recent press releases.
Important Information:
The tender offer described in this press release will commence
today. This press release is neither an offer to purchase nor a
solicitation of an offer to sell securities. Chesapeake has filed a
tender offer statement with the SEC, and will mail an offer to purchase,
forms of letter of transmittal and related documents to Bronco
stockholders. Bronco will file with the SEC, and will mail to Bronco
stockholders, a solicitation/recommendation statement on Schedule 14D-9.
INVESTORS AND BRONCO STOCKHOLDERS ARE STRONGLY ADVISED TO READ THE
TENDER OFFER STATEMENT (INCLUDING THE OFFER TO PURCHASE, LETTER OF
TRANSMITTAL AND RELATED TENDER OFFER DOCUMENTS) AND THE RELATED
SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 WHEN THEY ARE
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
The offer to purchase, the related letter of transmittal and
certain other offer documents, as well as the
solicitation/recommendation statement, will be made available to all
shareholders of Bronco at no expense to them.These
documents will also be available at no charge from the SEC's website at www.sec.gov.Free copies of these documents may also be obtained from the
Information Agent by contacting the MacKenzie Partners, Inc. at 105
Madison Avenue, New York, NY10016, or by calling (212)
929-5500 (collect) or (800) 322-2885 (toll-free).In
addition, investors and Bronco shareholders will be able to obtain a
free copy of these documents (when they become available) from Bronco by
contacting Bronco Drilling Company, Inc. at 16217 N. May Ave., Edmond,
OK 73013, attention: Investor Relations.
Forward Looking Statements:
This news release contains, among other things, certain statements
of a forward-looking nature. Such statements include all statements
other than those made solely with respect to historical fact. Numerous
risks, uncertainties and other factors may cause actual results to
differ materially from those expressed in any forward-looking statement.
These factors include, but are not limited to, (1) the occurrence of any
event, change or other circumstance that could give rise to the
termination of the definitive agreement; (2) successful completion of
the proposed transaction on a timely basis; (3) the impact of regulatory
reviews on the proposed transaction; (4) the outcome of any legal
proceedings that may be instituted against one or both of Chesapeake and
Bronco and others following the announcement of the definitive
agreement; (5) risks that the proposed transaction disrupts current
plans and operations and the potential difficulties in employee
retention as a result of the transaction; and (6) other factors
described in Chesapeake′s and Bronco′s filings with the SEC, including
their respective reports on Forms 10-K, 10-Q, and 8-K.
Many of the factors that will determine the outcome of the subject
matter of this communication are beyond either Chesapeake′s or Bronco′s
ability to control or predict. Except to the extent required by
applicable law, neither Chesapeake nor Bronco undertakes any obligation
to revise or update any forward-looking statements, or to make any other
forward-looking statements, whether as a result of new information,
future results or otherwise.
Chesapeake Energy Corporation
Investor Contacts:
Jeffrey L.
Mobley, CFA, 405-767-4763
Jeff.mobley@chk.com
or
John
J. Kilgallon, 405-935-4441
john.kilgallon@chk.com
or
Media
Contact:
Jim Gipson, 405-935-1310
jim.gipson@chk.com
