By Lisa Kerner
Charlotte, N.C., Jan. 8 - Forest Oil Corp. said it has entered into a definitive agreement to acquire 100% of the outstanding stock of The Houston Exploration Co. in a stock and cash transaction totaling about $1.5 billion plus the assumption of an estimated $100 million in net debt.
Houston Exploration shareholders will receive 0.84 shares of Forest common stock and $26.25 in cash for each share of Houston Exploration common stock for total consideration of roughly $52.47 per share.
The agreement includes a termination fee of $55 million.
JPMorgan Chase Bank, NA has underwritten a new $1.4 billion revolving credit facility to fund the cash portion of the acquisition, according to a news release.
The boards of directors of both companies have unanimously approved the transaction, which is subject to regulatory and shareholder approvals. JANA Partners LLC, which holds 14.7% of Houston Exploration's outstanding shares, also agreed to vote in favor of the transaction.
An estimated closing date was not disclosed.
"We are undertaking this significant acquisition to further strengthen our onshore North American asset base and to add drilling inventory for our proven acquire and exploit strategy," Forest Oil president and chief executive officer H. Craig Clark said in the release.
"This acquisition will add in excess of 3,200 drill sites to our existing inventory."
Houston Exploration is an independent natural gas and crude oil producer based in Houston.
Denver-based Forest Oil is engaged in the acquisition, exploration, development and production of natural gas and liquids primarily in North America.
| Acquirer: | Forest Oil Corp.
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| Target: | The Houston Exploration Co.
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| Payment per share: | $52.47 ($26.25 in cash plus 0.84 shares of Forest Exploration common stock)
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| Termination fee: | $55 million
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| Announcement date: | Jan. 8
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| Expected closing: | Upon approvals
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| Stock price for target: | NYSE: THX $48.69 on Jan. 5
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| Stock price for acquirer: | NYSE: FST $31.22 on Jan. 5
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