History
United Refining Energy raised $450 million as a blank check shell in 2007, then spent 2009 working to merge with Chaparral Energy, with the vote still pending in December 2009.
2007-2008: Raising the blank check fund
United Refining Energy Corp was a blank check company, meaning a shell formed to buy a business it had not yet identified. It focused on energy, particularly refining. The American Stock Exchange cleared its securities for trading on December 12, 2007, and on December 17 it closed its IPO of 45,000,000 units at $10.00 each, each unit being one share plus one warrant (a right to buy another share later). That raised $450,000,000. Its sponsor, United Refining, Inc., owned through CEO John Catsimatidis, paid $15,600,000 for private warrants. Of the money raised, $448,700,000 went into a trust account for public stockholders. Holders who redeemed in connection with a deal would receive $9.97 per share plus a share of trust interest. The filings do not say whether the over-allotment option, which allowed up to 6,750,000 more units, was used. The first accounts showed a $3,931,326 net loss, mostly a non-cash charge of $3,980,000 tied to the sponsor warrants. The record for 2008 and most of 2009 is quiet, apart from a February 2009 exchange notice about not holding a 2008 annual meeting, whose outcome is not shown.
2009: The Chaparral merger
On October 9, 2009 the company agreed to merge with Chaparral Energy, Inc., and filed a preliminary proxy on October 13. The first terms gave Chaparral holders 63,000,000 shares, with up to 15,000,000 more if targets were met. The deal could not close if holders of 40% or more of the public shares voted against and redeemed.
On November 23 the terms were improved for existing holders. Chaparral holders would receive 51.5 million shares at closing, and 10 million contingent shares would sit in escrow, released if a $15.00 share price target and credit-facility compliance were met. The sponsor would cancel 4,167,500 shares. The warrant redemption price rose from $0.50 to $0.55. Existing holders would own about 45.9% of the combined company with no redemptions, or 36.7% if 16,427,303 public shares were redeemed. The deal was valued at about $1.7 billion.
The S-4 registration became effective on November 27, and the proxy was mailed on November 30. Meetings were set for December 10. The trust held about $451.4 million, roughly $10.03 per share.
To secure the vote, on December 7 the sponsor and Chaparral stockholders agreed to buy about 5.5 million shares from institutional investors and vote them in favour. On December 10 the company also agreed to buy back 6,733,433 shares for $67,536,433.29, with sellers committing to vote for the merger. One deal involved a holder who had intended to vote against. The filings do not state the effect on redemptions. Both meetings were opened and adjourned to December 11. On December 16 the exchange filed to remove a class of the company's securities from listing. As of the latest record, the results of the vote and the closing of the merger are not shown.
Written from the 11 story beats below (2007 to 16 Dec 2009), which come from the company's own announcements and filings.