Harold Hamm, the billionaire executive chairman of Continental Resources Inc., is set to take the largest Bakken Shale producer private with a new deal announced Monday.
The Oklahoma City-based public explorer entered into an agreement with Omega Acquisition Inc., an Oklahoma subsidiary owned by Hamm, to begin a tender offer for the company’s outstanding common shares at $74.28/share. The total valuation of the deal would be around $4.3 billion.
Once complete, Continental would continue as the surviving corporation, wholly owned by the Hamm family.
Continental is the No. 1 producer in the Bakken Shale and the Anadarko Basin. The independent also is the No. 2 leaseholder in the Powder River Basin and is No. 10 in the Permian Basin.
The offer represents a 15% premium to the closing price of $64.50/share as of June 13, prior to the announcement of the initial offer. The offer would be financed with cash on hand, borrowings under an existing revolving credit facility and a new term loan facility.
Considered a founding father of the Lower 48 onshore unconventional boom, Hamm, then 21, founded Continental in 1967 after working in the oilfields as a teenager. The company went public in 2007 as the onshore gas and oil revolution began to take off.
Hamm has previously said the public markets have not sufficiently supported the oil and gas industry.
Siebert Williams Shank & Co. LLC’s managing director Gabriele Sorbara said she expects “shares to trade very close to the deal price.” She said the transaction does not require a vote by Continental shareholders and is expected to close before the end of the year.
