Credo Petroleum Announces Definitive Merger Agreement With Forestar Group, Inc.
04 June 2012 - 10:30PM
CREDO Petroleum Corporation (Nasdaq:CRED), an oil and gas
exploration and production company with significant assets in the
North Dakota Bakken and Three Forks, Kansas, Nebraska, the Texas
Panhandle and Oklahoma, announced today that its board of directors
has unanimously approved a definitive agreement pursuant to which
Forestar Group, Inc. (NYSE:FOR) will acquire all of the outstanding
shares of Credo's common stock for $14.50 per share, or
approximately $146 million in the aggregate. The transaction
has also been approved by the board of directors of Forestar.
James T. Huffman, Chairman of the Board, said: "We believe this
transaction captures the value we have created since we began
transitioning Credo from natural gas to oil about four years
ago. Forestar is a larger enterprise with significant oil and
gas assets, and it is well positioned to accelerate the transition
that we have set in motion. We are excited to see this transaction
completed and look forward to the synergy and leverage that the
combined human and technical resources are expected to
achieve."
The transaction is expected to close in the second half of 2012,
and is subject to a number of customary closing conditions,
including approval of Credo's stockholders. The transaction is
not subject to approval by Forestar stockholders nor is it subject
to any financing conditions.
Houlihan Lokey Financial Advisors, Inc. and Northland Capital
Financial Services, LLC are serving as financial advisors to Credo
and Davis Graham & Stubbs LLP is serving as legal advisor to
Credo in connection with the transaction. Skadden, Arps, Slate,
Meagher & Flom LLP is serving as legal advisor to Forestar and
Goldman, Sachs & Co. is serving as financial advisor to
Forestar in connection with the transaction.
Additional Information Regarding This
Transaction
In connection with the proposed transaction, Credo will file
with the Securities and Exchange Commission (the "SEC") a proxy
statement. The definitive proxy statement will be mailed to
stockholders of Credo. Credo urges investors to read the proxy
statement regarding the proposed transaction when it becomes
available because it will contain important information about the
proposed transaction. You may obtain a free copy of the proxy
statement (when available) and other related documents filed by
Credo with the SEC at the SEC's website at www.sec.gov. The proxy
statement (when it is available) may also be obtained for free by
accessing Credo's website at www.credopetroleum.com by clicking on
the link for "Investor Relations", then clicking on the link for
"Proxy Statement".
Participants in This Transaction
Credo and its directors, executive officers and certain other
members of management and employees may be deemed to be
participants in the solicitation of proxies from Credo's
stockholders in connection with the proposed
transaction. Information regarding the persons who may, under
the rules of the SEC, be considered participants in the
solicitation of Credo's stockholders in connection with the
proposed transaction, including the interests of such participants
in the proposed transaction, will be set forth in the proxy
statement when it is filed with the SEC. You can find information
about Credo's executive officers and directors in Credo's
definitive proxy statement filed with the SEC on
February 28, 2012.
About Credo
CREDO Petroleum Corporation (Nasdaq:CRED) is a publicly traded
independent energy company headquartered in Denver,
Colorado. The Company is engaged in the exploration for and
the acquisition, development and marketing of crude oil and natural
gas in the Mid-Continent and Rocky Mountain regions with operations
primarily in North Dakota, Kansas, Nebraska, Texas Panhandle and
Oklahoma. Credo uses advanced technologies to systematically
explore for oil and gas and, through its patented Calliope Gas
Recovery System, to recover stranded reserves from depleted gas
reservoirs.
About Forestar
Forestar Group Inc. operates in three business segments: mineral
resources, real estate and fiber resources. At the end of first
quarter 2012, the real estate segment owns directly or through
ventures over 146,000 acres of real estate located in nine states
and twelve markets in the U.S. The real estate segment has 16 real
estate projects representing approximately 27,600 acres currently
in the entitlement process, and 73 entitled, developed and under
development projects in seven states and eleven markets
encompassing over 16,000 acres, comprised of almost 27,000
residential lots and over 2,400 commercial acres. The mineral
resources segment manages approximately 594,000 net acres of oil
and gas mineral interests located principally in Texas, Louisiana,
Alabama, and Georgia. Also included in the mineral resources
segment is a 45% nonparticipating royalty interest in groundwater
produced or withdrawn for commercial purposes from approximately
1.4 million acres in Texas, Louisiana, Georgia and Alabama and
about 17,800 acres of groundwater leases in central Texas. The
fiber resources segment includes the sale of wood fiber and
management of our recreational leases. Forestar's address on the
World Wide Web is www.forestargroup.com.
Forward Looking Statements
This press release includes certain statements that may be
deemed to be "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as
amended, including the expected terms and timing of the
transaction. All statements included in this press release,
other than statements of historical facts, address matters that
Credo reasonably expects, believes or anticipates will or may occur
in the future. Such statements are subject to various
assumptions, risks and uncertainties, many of which are beyond the
control of Credo. Investors are cautioned that any such
statements are not guarantees of future performance and that actual
results or developments may differ materially as a result of a
variety of risks and uncertainties, including: the ability to
obtain the approval of the transaction by Credo's stockholders; the
timing to consummate the proposed transaction; and the risk that a
condition to closing of the proposed transaction may not be
satisfied. No assurances can be given that any of the events
anticipated by the forward-looking statements will transpire or
occur, or if any of them do so, what impact they will have on the
results of operations or financial condition of Credo. Given these
uncertainties, investors are cautioned not to place undue reliance
on such forward-looking statements. Investors are encouraged
to read the "Forward-Looking Statements" and "Risk Factors"
sections included in Credo's Annual Report on Form 10-K/A for
more information. Although Credo may from time to time
voluntarily update its prior forward looking statements, it
disclaims any commitment to do so except as required by securities
laws.
CONTACT: Michael D. Davis
Chief Operating Officer and CEO (Interim)
or
Alford B. Neely
Chief Financial Officer
303-297-2200
Website: www.credopetroleum.com
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