Each one in plain English, with the numbers worked through for a shareholder.
12 Apr 2017business combination▼ BadMajor
The company disclosed four shareholder or warrant-holder lawsuits tied to the SSE merger: Comeaux (W.D. Oklahoma, Feb 22, 2017; injunction motion withdrawn April 10), Sudarsan (S.D.N.Y., March 31; names Patterson-UTI and seeks to block cancellation of SSE warrants), and Gael and Scarantino (Delaware Chancery, April 7 and April 10). The company calls them without merit and says none is expected to affect the merger, which it expects to occur April 20, 2017; outcomes and costs cannot be predicted. The filing also references a joint press release (April 10) extending the deadline for SSE warrant holders to exercise.
The company announced that its special shareholder meeting to vote on issuing shares to SSE holders for the merger will be held April 20, 2017 at 9:00 a.m. Central in Houston, with holders of record at Feb 22, 2017 entitled to vote. This supplies the meeting date that was missing from the Feb 22 record-date filing; the vote result is not yet known.
The company filed Amendment No. 2 to the SSE merger registration statement (S-4), again a preliminary joint proxy statement/prospectus. The visible terms are the same as in Amendment No. 1 (up to 49,559,000 shares, about $1.42 billion at the Dec 12, 2016 price, up to about 25% for former SSE holders); the only difference seen in the text is a page reference moving from 148 to 149. Meeting dates remain blank and the merger is still pending.
The company filed Amendment No. 1 to its registration statement (S-4) for the Seventy Seven Energy (SSE) merger, a draft joint proxy statement/prospectus that is still preliminary and not yet effective. It restates the terms: up to 49,559,000 new Patterson-UTI shares for SSE holders (about $1.42 billion at the Dec 12, 2016 price), former SSE holders owning up to about 25% of the combined company, existing Patterson-UTI shares unchanged, and about 59% of SSE shares committed by voting agreements. The meeting date is still blank, so approval remains outstanding.
The company set February 22, 2017 as the record date for its special shareholder meeting to vote on issuing shares to SSE holders for the merger (and on adjourning the meeting if needed). Shareholders of record at that date can vote; the filing gives no meeting date or vote result, so approval is still outstanding.
The company filed updated pro forma combined financial statements for the SSE merger, based on December 31, 2016 balance sheet and full-year 2016 results. They show a combined 2016 net loss of about $433.1 million (versus Patterson-UTI's own $318.6 million), pro forma total assets of about $5.78 billion, and 213.9 million weighted shares; the filing says the figures are preliminary and not necessarily indicative of actual results. The merger is still pending.
Wellington Management Group LLP, Wellington Group Holdings LLP, Wellington Investment Advisors Holdings LLP, Wellington Management Company LLP reported a PATTERSON UTI ENERGY INC shareholding of 11,103,499 shares (7.50% of votes) in a periodic institutional filing.
The company sold 18,170,000 new shares (15,800,000 plus the underwriters' full 2,370,000 option) at $26.45 per share in the offering priced on January 24, 2017, with expected net proceeds of about $471 million. The money is meant to repay SSE's debt when the merger closes (with revolver borrowings if needed); if the merger does not close it goes to general corporate purposes. This meets the equity-raise condition tied to the credit facility increase and dilutes existing shareholders, and the offering is not conditioned on the merger.
On January 24, 2017 the company agreed with lenders to use about $95.8 million of the $100 million increase option on its revolving credit facility, taking total commitments to about $595.8 million. The increase only takes effect if the SSE merger closes, the SSE credit facility is repaid and terminated, and the company raises at least $300 million of gross proceeds from a stock offering by May 31, 2017.
Alongside the SSE merger registration statement, the company filed Seventy Seven Energy's audited 2015 financial statements, its unaudited statements for the period to September 30, 2016, and pro forma combined figures. It adds financial detail on the pending merger but no new terms; the merger is still not completed.
On January 23, 2017 the company filed the registration statement and joint proxy for the SSE merger, covering up to 49,559,000 new shares; the filing values the deal at about $1.42 billion at the December 12, 2016 share price and says former SSE holders would own up to about 25% of the combined company. Patterson-UTI shareholders will vote on the share issuance at a special meeting, and the board recommends voting for it. It is a preliminary filing, so the merger has not yet been approved or completed.
On December 12, 2016 the company agreed to buy Seventy Seven Energy (SSE) by issuing up to 49,559,000 new Patterson-UTI shares to SSE holders, with SSE becoming a wholly owned subsidiary. The deal needs both companies' shareholder approvals, antitrust clearance and other conditions; holders of about 61% of SSE have agreed to vote in favour, and a $150 million bridge facility from Canyon Capital is committed to repay some SSE debt. Termination fees of up to $100 million (payable by Patterson-UTI) or $40 million (by SSE) apply in certain cases. Existing Patterson-UTI shareholders keep their shares but will be diluted by the new issuance.
