16 June 2011listing compliance notice▼ BadMajor
Bronco Drilling Company, Inc. deregistered its securities, ending its obligation to file reports with the SEC.
Announcements, explained
Each one in plain English, with the numbers worked through for a shareholder.
9 June 2011business combination● NeutralMajor
Bronco reports the Chesapeake deal closed. Nomac Acquisition merged into Bronco on June 6, 2011, with Bronco surviving as an indirect wholly owned Chesapeake subsidiary, and each remaining share converted into the right to receive $11.00 cash (except appraisal-rights holders). Former holders no longer have any interest in Bronco's future earnings. The Inbursa warrant was cashed out for $21,763,080 and the Inbursa credit agreement was repaid and terminated from Bronco's cash. NASDAQ trading ended after June 6, and a Form 25 delisting was filed with a Form 15 deregistration to follow. This ends the open threads of the tender offer, merger and settlement approval.
6 June 2011listing compliance notice● NeutralMajor
Bronco Drilling Company, Inc.'s exchange filed to remove a class of its securities from listing.
6 June 2011business combination● NeutralMajor
Chesapeake reports the tender offer expired June 3, 2011 with about 24,959,224 shares tendered (about 86.7% of shares outstanding, or 84.3% excluding shares tendered by guaranteed delivery), and all were accepted for payment at $11.00. Chesapeake then used a 'top-up' option to buy 63,550,899 new shares and passed 90%, so it plans a short-form merger without a shareholder vote. Remaining shares convert to $11.00 cash (except where appraisal rights are properly exercised), and Bronco shares will no longer be listed on NASDAQ. This resolves the open question of the tender offer's outcome.
31 May 2011business combination● Neutral
Bronco's third amendment to its response to the offer adds more detail on the Johnson Rice fairness opinion, including its cash-flow projections. Under the base case, EBITDA is $42M in 2011 and $62M a year from 2012 through 2015, using management projections that include two new rigs by end of 2011 for a total of 24. It also repeats the lawsuit updates, including the May 27 Oklahoma agreement in principle, and the offer extension to June 3, 2011. This adds disclosure, in line with the settlement terms; the $11.00 cash price is unchanged and the offer was still open.
31 May 2011business combination● Neutral
Chesapeake's fifth amendment to its tender offer extends the $11.00 cash offer a second time, from May 31 to 5:00 pm New York time on Friday, June 3, 2011. It says the Oklahoma shareholder suit reached an agreement in principle on May 27 to resolve it, in return for extra disclosures by Bronco and this extension. The Delaware settlement agreed May 17 and the class certified May 20 are repeated. The price is unchanged and the offer was still open, so the shareholder outcome was not yet final.
23 May 2011business combination● NeutralMajor
Bronco reports that on May 17, 2011 it amended the Chesapeake merger agreement: the offer is extended from May 23 to May 31, 2011, and the period after a termination in which a termination fee may be payable drops from 12 to 9 months. This came with a memorandum of understanding to settle the Delaware shareholder suits, which needs Delaware court approval and is contingent on the merger closing. On May 20 the Delaware court certified a class of holders from April 14, 2011 to the merger's completion. If the settlement is not approved, Bronco will keep defending. The $11.00 cash price is unchanged and the outcome is not yet final.
20 May 2011business combination● Neutral
Chesapeake's fourth amendment to the tender offer only rewords two of the offer conditions: the antitrust waiting period must have expired or terminated, and Chesapeake must not be required to sell assets or accept restrictions on its business (a 'Burdensome Condition'). No new price, date or figure is given; the $11.00 cash offer is unchanged. The fee-table numbers repeat earlier filings.
18 May 2011business combination● Neutral
Bronco's second amendment to its response to the tender offer adds background on how the Chesapeake deal came about, as part of the lawsuit settlement terms. It describes an October 2010 approach by Jefferies about Chesapeake and a separate expression of interest from an unnamed larger competitor ('Company A'), and says Chesapeake's earlier idea was about $200 million, or $6.75 per share. It also says Johnson Rice contacted at least seven other potential buyers, none of whom progressed beyond preliminary discussions, and that no higher offer was seen as likely. This adds detail rather than changing the $11.00 cash terms.
18 May 2011business combination● NeutralMajor
Chesapeake's third amendment to its tender offer says the parties to the Delaware shareholder suits reached an agreement in principle on May 17, 2011 to settle. In return, the fee Bronco would owe Chesapeake if it later does a rival deal shrinks from a 12-month to a 9-month window, Bronco will add disclosures, and the offer is extended from May 23 to May 31, 2011. The $11.00 cash price is unchanged. It also adds detail on the 2010 contacts leading to the offer (including Jefferies' October 2010 approach and Chesapeake's $11.00 letter of April 4, 2011), says a preliminary injunction hearing was set for May 19, and notes one Oklahoma suit remains, stayed. The settlement needs court approval, so the suits are not yet resolved.
18 May 2011business combination● NeutralMajor
Bronco filed a preliminary proxy for a special stockholder meeting (date not yet set) to vote on adopting the Chesapeake merger agreement and on an advisory vote on executive merger pay. The board unanimously recommends FOR. If the tender offer completes, Chesapeake's majority stake would guarantee approval; holders who don't tender get $11.00 cash in the merger unless they exercise appraisal rights. This is the back-end merger step; the filing is a draft, and the outcome is not final until the deal closes.
5 May 2011business combination● Neutral
Chesapeake's second amendment to the tender offer mainly clarifies wording: shares tendered will be accepted and paid for promptly after the offer expires and after government-approval conditions are met, and the minimum-tender condition can only be waived with Bronco's consent. It also updates the lawsuit count to two Oklahoma suits dismissed, leaving four in Oklahoma and four in Delaware. The $11.00 price and terms are unchanged.
3 May 2011business combination● NeutralMajor
Bronco's own amendment to its response to the tender offer repeats the same two updates: early termination of the antitrust waiting period on May 2, 2011 (one offer condition now met), and ten shareholder class actions (one Oklahoma suit dismissed) seeking to block the $11.00 cash deal. Bronco says the suits are entirely without merit and will defend them. The majority-tender condition and the lawsuits remain open, so the shareholder outcome is not final.
3 May 2011business combination● NeutralMajor
Chesapeake's tender-offer amendment says the US antitrust waiting period for the $11.00 cash offer was ended early on May 2, 2011, satisfying one of the offer's conditions. It also says the shareholder lawsuits have grown to ten (six in Oklahoma County, one since dismissed, and four in Delaware Chancery), seeking to block the deal; one Delaware suit was amended April 29 to add claims that the offer documents inadequately described the process and the Johnson Rice fairness opinion. Chesapeake calls the suits without merit. The offer is not yet complete.
26 Apr 2011business combination● NeutralMajor
Bronco filed its formal response to Chesapeake's tender offer. The offer is $11.00 cash per share, initially open until midnight New York time on Monday, May 23, 2011, and may be extended. Shares not tendered would be converted into the same $11.00 in the merger, except for holders who properly exercise appraisal rights. Directors and executive officers own 498,114 shares (worth about $5.48M at the offer price) and hold 1,046,088 unvested restricted shares (about $11.5M) that vest at the merger. Executives get severance of three times salary plus bonus (plus tax gross-up) if they leave within two years after a change of control. This is the filed text only; the board's recommendation section is cut off in the excerpt provided, though earlier filings say the board unanimously recommends the offer.
26 Apr 2011business combination▲ GoodMajor
Chesapeake's subsidiary Nomac Acquisition formally launched its tender offer on April 26, 2011 at $11.00 cash per share, as the earlier announcement said it would. The fee table values it at about $376.6M, counting 28,800,059 shares outstanding as of April 13, 2011 plus 5,440,770 warrant shares. The filing lists the shareholder lawsuits among its exhibits. The offer is not yet complete, so the shareholder outcome remains open until shares are accepted and the merger closes.
22 Apr 2011business combination▼ Bad
This is the same Item 8.01 8-K text as the Schedule 14D-9 filing of the same day. It reports the three purported class actions against Bronco, its directors and Chesapeake over the $11.00 Chesapeake deal, which seek to block it. Bronco calls them meritless and will defend them. It adds nothing beyond the 14D-9C version, and the tender offer had not yet started at that time.
22 Apr 2011business combination▼ BadMajor
Filed as a Schedule 14D-9 pre-commencement communication, this repeats Bronco's April 22 8-K. Three purported shareholder class actions (two in Oklahoma County, served April 18 and 19; one in Delaware Chancery, served April 20) name Bronco, its directors including the CEO, and Chesapeake (and Nomac in the Delaware suit). They allege the board breached its duties and that the deal undervalues Bronco, and seek to block the deal plus fees and damages or rescission. Bronco says the suits are without merit and will defend them. This is a new legal risk to the pending Chesapeake deal; no ruling or injunction is reported.
18 Apr 2011business combination▲ GoodMajor
The formal merger agreement with Chesapeake (via Nomac Acquisition), dated April 14, 2011, is now filed. Chesapeake will tender for all shares at $11.00 cash, then merge Bronco into a wholly owned Chesapeake subsidiary. The offer needs a majority of shares tendered (fully diluted) and US antitrust waiting-period expiry. The Inbursa warrant ends at closing and is paid out in cash (offer price minus exercise price, times the shares it covered). Unvested restricted stock vests and is cashed out. Third Avenue and Carso (about 32%) agreed to tender. Bronco owes Chesapeake a $13M termination fee plus up to $1.5M expenses in certain cases, such as accepting a superior proposal. This confirms the terms announced on April 15 and resolves the open question on warrant treatment, but the shareholder outcome is not final until closing.
18 Apr 2011business combination● Neutral
Bronco filed, as a pre-tender-offer communication, a copy of its April 15, 2011 press release on the Chesapeake deal: $11.00 per share in cash, a unanimous board recommendation, and a Q2 2011 expected close. It adds nothing new beyond the Chesapeake announcement already filed, and the tender offer had not yet commenced.
15 Apr 2011business combination▲ GoodMajor
On April 15, 2011 Chesapeake Energy, through its subsidiary Nomac Acquisition, announced a definitive agreement to buy Bronco for $11.00 per share in cash (about $315M including debt, net working capital and warrants), via a tender offer followed by a merger for any remaining shares. Bronco's board unanimously recommends acceptance, and Third Avenue Management and Inmobiliaria Carso (about 32% combined) have committed to tender; closing is expected in Q2 2011. This replaces Bronco's independent path; the offer had not yet started, and is conditioned on a majority of shares tendering and regulatory clearances.
11 Feb 2011debt financing● Neutral
On Feb 9, 2011 Bronco amended its Banco Inbursa revolver, cutting the lender's commitment from $75M to $45M and reducing the number of rigs pledged as collateral. The filing also furnished a monthly operations and rig status press release for January 2011, whose contents are not in the text provided. The filing gives no reason for the reduction; it follows the 2010 asset sales that were to pay down this facility (inference on link).
27 Sept 2010asset acquisition disposition▲ GoodMajor
Sept 21-23, 2010 Bronco auctioned substantially all of its discontinued well servicing segment, plus drilling rigs 2, 9, 52, 70, 75 and 94 and ancillary equipment, for expected net proceeds of about $20.8M, and separately sold rigs 41 and 42 to Windsor Permian LLC for about $6.5M. The filing says the rigs sold were not being used in the business, and both sets of proceeds are meant to pay down the Inbursa revolving credit facility.
16 Feb 2010material agreement● NeutralMajor
On Feb 9, 2010 Banco Inbursa waived Bronco's compliance with the maximum debt-to-EBITDA covenant (3.5x) under the Sept 2009 credit agreement through the quarter ended June 30, 2010, and any default arising from it. The filing does not say why the waiver was needed; it follows the new Inbursa facility, so the lender is giving temporary relief but the covenant itself is unchanged after June 2010.
23 Sept 2009capital raising announcement● NeutralMajor
On Sept 18, 2009 Bronco sold 60% of a new Mexican rig venture, Bronco MX, to Carso Infraestructura y Construccion for US$30.0M (plus 60% reimbursement of import VAT), keeping 40% after contributing six rigs; three more rigs are to follow when their leases end. It also replaced the Fortis revolver with a new $75M revolver from Banco Inbursa (matures Sept 17, 2014; Eurodollar rate + 5.80%; max debt-to-EBITDA 3.5x) and issued Inbursa a three-year warrant for up to 5,440,770 shares at $6.50-$7.50. Carso's partner in Bronco MX shares a Mexican-group link with the Slim-family holders in earlier notices (inference from names); the warrant could dilute existing shareholders if exercised, capped at 19.99% of shares outstanding.
29 Sept 2008debt financing● NeutralMajor
On September 29, 2008 Bronco and its domestic subsidiaries signed an Amended and Restated Credit Agreement with Fortis Bank-led lenders for a revolving facility of up to $150 million, maturing September 29, 2013. It carries interest of 4% over LIBOR or 3% over prime, a 0.5% unused fee, a first lien on substantially all assets, and covenants including a minimum fixed charge ratio (1.05 rising to 1.15) and maximum total leverage of 2.00. This replaces the January 2006 Fortis facility (same $150M size, maturing 2009) on a longer term but at a higher stated rate than the earlier LIBOR+2.0-3.0% range.
8 Aug 2008material agreement termination▼ BadMajor
On August 8, 2008 Bronco and Allis-Chalmers mutually terminated their merger agreement (as amended June 1, 2008), because it was determined unlikely that Bronco's stockholders would adopt it by the required vote. Bronco will pay Allis-Chalmers $4.5 million and both sides release all claims. This ends the buyout, so Bronco stays an independent listed company and holders do not receive the merger consideration.
2 June 2008business combination▲ GoodMajor
Bronco and Allis-Chalmers amended their January 2008 merger agreement on June 1, 2008. Consideration is now $200.0M cash plus a fixed 16,846,500 Allis-Chalmers shares, worth $18.25 per Bronco share at the May 30 close, and the stock part is expected to be tax-free. Bronco holders would own about 32% of the combined company (up from 27.9%), and the share number no longer adjusts with price. The deal still needs Bronco and Allis-Chalmers shareholder and regulatory approvals.
24 Jan 2008material agreement▲ GoodMajor
On January 23, 2008 Bronco agreed to be acquired by Allis-Chalmers Energy in a deal valued at about $437.8 million: $280.0M cash plus about $157.8M of Allis-Chalmers stock, or $16.33 per Bronco share, a 21.8% premium to the January 23 close. It needs approval from both companies' shareholders and regulators; Bronco owes a $10.0M termination fee in specified circumstances, and the receipt would be taxable to Bronco holders. Bronco holders would own about 27.9% of the combined company.
15 Nov 2007material agreement● NeutralMajor
On November 15, 2007 Bronco's subsidiary agreed to take a 25% stake in Challenger Limited (Isle of Man) in exchange for 6 drilling rigs and $5 million cash, with closing expected in Q4 2007 subject to conditions and satisfactory due diligence. Bronco also expects to sell Challenger four other rigs and equipment for $12 million in installments, and to provide Challenger with operational and management support. This is a new international move, separate from the Eagle Well diversification into well services.