History
CNX Gas, a gas producer majority-owned by CONSOL Energy, bought gas rights and secured pipeline capacity, then was taken private by CONSOL's $38.25-a-share offer in 2010.
2006-2007: Pipelines and gas rights
CNX Gas was a coalbed methane and gas producer, based in Canonsburg, Pennsylvania, that listed on the stock market in early 2006. CONSOL Energy was its controlling owner, holding 125,800,067 of about 151 million shares, or roughly 83.3%.
In May 2006 a subsidiary signed two firm gas transport agreements with East Tennessee Natural Gas. One covered up to 210,000 Dth a day (a Dth is a unit of gas energy) for 15 years, the other up to 40,000 Dth a day for 3 years. Both would start only once the Jewell Ridge Lateral pipeline was completed and in service. The record does not show that completion.
In June 2007 CNX Gas agreed to a layered deal. It would buy coal reserves from Consolidation Coal for $45.0 million cash plus deferred and contingent payments, including $36.0 million due 35 years after closing on one block. It would then swap that coal to Peabody affiliates for oil and gas rights, including coalbed methane, under about 606,101 acres. Separately it would buy rights under about 273,921 acres from Peabody Natural Gas for $15.0 million. Its gas rights within the coal areas would pass to the Peabody affiliates but revert to CNX Gas once mining there finished. Closings were set for June 19-20, 2007, with title-defect claims allowed until September 20, 2007. The outcomes of those claims are not in the record.
2008-2010: CONSOL moves to buy the rest
The record is thin for 2008. In January CNX Gas filed a preliminary communication about a possible tender offer, but its terms were only in exhibits not shown here. Share counts barely moved over these years, from 150,971,636 at the end of 2008 to 151,021,770 at the end of 2010.
The offer became concrete on March 22, 2010. CONSOL announced it would bid $38.25 cash for every CNX Gas share it did not own, a 24% premium to the March 19 close. T. Rowe Price, whose clients held about 9.47 million shares, agreed to tender. CONSOL filed the formal offer on April 28, covering about 25.2 million shares, worth roughly $964.7 million, and on May 7 CNX Gas signed a new $700 million secured credit facility to replace its $200 million one from 2005.
CNX Gas's board committee of independent directors, advised by Lazard, which called the price fair, stayed neutral. Shareholders sued to block the deal. On May 25 the Delaware court refused an injunction, though the judge said the stricter "entire fairness" standard would apply to a damages suit. He sent the standard-of-review question to the Delaware Supreme Court but denied an injunction while that was pending, and the plaintiffs withdrew their emergency appeal.
2010: Going private
The offer expired on May 26, 2010 with about 24,006,706 shares tendered, all accepted. With its existing stake, CONSOL held about 99.16% of CNX Gas and said it would promptly merge the rest out for $38.25 cash each, with appraisal rights (a right to seek a court-set price) for those who properly claimed them.
On June 3 the exchange filed to remove CNX Gas shares from listing, and on June 14 the company suspended its duty to file reports with the SEC.
As of the latest record, in November 2015, CNX Gas was no longer a public company. It appeared only as a subsidiary guarantor on CONSOL's note offerings. The damages litigation had no later update, and a merger-completion filing was not seen.
Written from the 14 story beats below (2006 to 14 June 2010), which come from the company's own announcements and filings.