13 Oct 2016capital raising announcement● NeutralMajor
RSP Permian agreed to buy Silver Hill Energy Partners (SHEP I and SHEP II, sellers affiliated with Kayne Anderson) for $2.4 billion at closing: $1.25 billion in cash and about 31.0 million new shares. SHEP I is expected to close in Q4 2016. SHEP II is expected to close in Q1 2017, needs shareholder approval of the share issuance, and is conditioned on SHEP I closing. If approval is not obtained by March 1, 2017, the cash price rises. After closing, existing holders would own about 76.6% and the sellers about 23.3% of roughly 132.6 million fully diluted shares. The sellers would be subject to a standstill capping them at 29.9% for up to two years. The company also announced an underwritten offering of 20,000,000 shares (plus a 3,000,000-share option), which is not part of the 31.0 million issued to the sellers.