By Lisa Kerner
Charlotte, N.C., April 27 - A newly formed subsidiary of Atlas America, Inc. will merge with and into Atlas Energy Resources, LLC, simplifying the organizational structure of the companies and creating "a more attractive investment opportunity with a larger public float," it was announced on Monday.
Atlas America owns approximately 48% of the common unit interests and all of the management incentive interests in Atlas Energy.
Both the Atlas America board of directors and the special committee of the board of Atlas Energy have approved a transaction in which each class B common unit of Atlas Energy not currently held by Atlas America will be converted into 1.16 shares of Atlas America common stock.
Atlas Energy will survive as a wholly owned subsidiary of Atlas America, which will be renamed Atlas Energy, Inc.
"We believe that, by merging with Atlas America, we will create a new entity that will have the financial resources to accelerate and expand the development of our Marcellus Shale assets where we have already identified 4 to 6 trillion cubic feet of additional reserves," Atlas Energy president Richard D. Weber said in a company news release.
The board of directors of the combined entity will consist of the 10 independent directors of Atlas America and Atlas Energy as well as Edward E. Cohen and Jonathan Z. Cohen, chief executive officer and vice chairman, respectively, of both Atlas America and Atlas Energy.
Atlas Energy said its net debt outstanding will be reduced by cash on hand at Atlas America. In addition, Atlas Energy will suspend distributions to its common unitholders pending the merger's close.
J.P. Morgan Securities, Inc. advised Atlas America, and UBS Investment Bank advised Atlas Energy.
Both companies are based in Moon Township, Pa., and develop and produce natural gas and oil.
| Acquirer: | Atlas America, Inc.
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| Target: | Atlas Energy Resources, LLC
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| Announcement date: | April 27
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| Price per share: | 1.16 shares of Atlas America common stock
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| Expected closing: | Upon approvals
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| Stock price of acquirer: | Nasdaq: ATLS: $12.41 on April 24
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| Stock price of target: | NYSE: ATN: $14.35 on April 24
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