Athlon purchase to trigger change-of-control offer for 7 3/8% notes

By Angela McDaniels

Tacoma, Wash., Sept. 29 – Athlon Energy Inc. agreed to be acquired by Encana Corp., and Encana expects the acquisition to trigger the change-of-control provisions in the indenture governing Athlon’s $500 million of 7 3/8% senior notes due 2021.

Under the change-of-control provisions, the company must offer to buy back the notes at 101% of par plus accrued interest. The offer must begin within 30 days of the closing of the acquisition, according to an Encana news release.

Encana does not expect the acquisition to trigger the change-of-control provisions in the indenture governing Athlon’s $650 million 6% senior notes due 2022.

Encana expects that any of the 7 3/8% notes not tendered in the change-of-control offer and all of the 6% notes will remain outstanding, subject to any future refinancing Encana may pursue based on market conditions.

Athlon agreed to be acquired for $58.50 per share, or about $5.93 billion. The price is a 25% premium over Friday’s closing share price. Encana will assume its $1.15 billion of senior notes. The transaction is expected to close by the end of the year.

Encana and Athlon Energy are oil and gas companies based in Calgary, Alta., and Forth Worth, Texas, respectively.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.