NEW YORK, Sept. 9, 2019 /PRNewswire/ -- Paulson & Co.
Inc. ("Paulson"), as manager of funds holding 21.6 million shares,
or 9.5% of those outstanding, of Callon Petroleum Company ("Callon"
or the "Company") (NYSE: CPE), today sent a letter to the board of
Callon. The letter informs Callon that Paulson plans to vote
its shares against the proposed acquisition of Carrizo Oil &
Gas Inc. ("Carrizo") (NASDAQ: CRZO) and urges the board and
management to pursue a sale of the Company.
The letter outlines the reasons why Paulson opposes the proposed
acquisition:
- Callon's stock price has fallen by 36% since the transaction
was announced.
- Shareholders have lost $530
million in value.
- Callon is paying Carrizo a 25% premium, which is unjustifiable
given the inferior assets of Carrizo, and results in the transfer
of $240 million in value from Callon
shareholders to Carrizo shareholders.
- Callon will lose its premium valuation as a "pure play" Permian
producer, resulting in multiple contraction.
- Based on the multiples at which pure Permian producers trade,
Callon's shares could be worth 64% more than its current value
through a sale of the Company.
- Adding Carrizo's inferior Eagle Ford assets will permanently
reduce the attractiveness of Callon to potential
acquirers.
The sharp decline in the Company's stock price since the
transaction announcement on July 15,
2019 demonstrates the market's judgement of the
value-eroding nature of the proposed acquisition. Holding only 0.5%
of the Company's shares outstanding, the board and management have
not been meaningfully exposed to the value that has been lost by
Callon shareholders. If the board is truly interested in its
shareholders, given the magnitude of the difference between the
current stock price of Callon and its takeover value, it should
pursue a sale of Callon.
The full letter is attached to this press release.
About Paulson & Co. Inc.
Paulson, founded in 1994, is an investment management firm
headquartered in New York.
Contact Details
Marcelo Kim
Paulson & Co. Inc.
212-599-6628
Cautionary Statement
Paulson & Co. Inc. ("Paulson") is not soliciting proxies
in connection with any matter brought before shareholders of the
companies identified in this letter or press release.
Clients, funds and accounts managed by Paulson (the "Paulson
Clients") may from time to time beneficially own, and/or have an
economic interest in, shares of the companies discussed in this
letter and as a result, the Paulson Clients have an economic
interest in the forward-looking statements, estimates and
projections discussed above and their impact on the companies
discussed in this letter. The Paulson Clients are in the business
of trading – buying and selling – securities, and may trade in the
securities of the companies discussed in this letter. You should
also assume that the Paulson Clients may from time to time sell all
or a portion of their holdings of one or more of the companies in
open market transactions or otherwise (including via short sales),
buy additional shares (in open market or privately negotiated
transactions or otherwise), or trade in options, puts, calls, swaps
or other derivative instruments relating to some or all of such
shares, regardless of the views expressed in this letter.
The views contained in this letter and press release
represent the opinions of Paulson as of the date hereof.
Paulson reserves the right to change any of its opinions expressed
herein at any time, but is under no obligation to update the data,
information or opinions contained herein. Under no circumstances is
this letter or press release intended to be, nor should it be
construed as advice or a recommendation to enter into or conclude
any transaction or buy or sell any security (whether on the terms
shown herein or otherwise). This letter should not be construed as
legal, tax, investment, financial or other advice. Additionally,
this letter should not be construed as an offer to buy any
investment in any fund or account managed by Paulson.
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SOURCE Paulson & Co. Inc.