Introductory Note
As previously disclosed in the Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on October 17, 2022, Continental Resources, Inc., an Oklahoma corporation (“Continental” or the “Company”), entered into an Agreement and Plan of Merger, dated as of October 16, 2022 (the “Merger Agreement”), with Omega Acquisition, Inc., an Oklahoma corporation (“Merger Sub”), incorporated by Harold G. Hamm (the “Founder”).
Pursuant to the Merger Agreement, Merger Sub commenced a tender offer (the “Offer”) to acquire all of the outstanding shares of common stock, par value $0.01 (the “Shares”), of the Company, other than: (i) Shares owned by the Founder, certain of his family members and their affiliated entities (collectively, the “Hamm Family”) and (ii) shares underlying unvested equity awards issued pursuant to the Company’s long-term incentive plans (collectively, “Rollover Shares”) for $74.28 per Share (the “Offer Price”), in cash, without interest and subject to deduction for any required withholding taxes.
The Offer expired at one minute after 11:59 p.m., New York City time, on November 21, 2022. American Stock Transfer & Trust Co., LLC, in its capacity as depositary for the Offer, advised that, as of the expiration of the Offer, a total of 36,312,840 Shares were validly tendered and not validly withdrawn pursuant to the Offer, representing approximately 62.5% of the outstanding Shares other than Rollover Shares. In addition, Notices of Guaranteed Delivery have been delivered for 3,443,485 Shares, representing approximately 5.9% of the outstanding Shares other than Rollover Shares. Each condition to the Offer was satisfied, and, on November 22, 2022, Merger Sub irrevocably accepted for payment all Shares that were validly tendered and not withdrawn.
On November 22, 2022, immediately prior to the Acceptance Time, the Founder contributed 100% of the capital stock of Merger Sub to the Company. In addition, following consummation of the Offer, Merger Sub merged with and into the Company, with the Company surviving the merger (the “Merger”). The Merger was completed pursuant to Section 1081.H of the General Corporation Act of the State of Oklahoma (the “OGCA”), with no vote of the Company’s shareholders required to consummate the Merger. At the effective time of the Merger (the “Effective Time”), each issued and outstanding Share (other than (i) the Rollover Shares; (ii) Shares owned by the Company as treasury stock or owned by any wholly owned subsidiary of the Company, including Shares irrevocably accepted by Merger Sub pursuant to the Offer; and (iii) Shares held by a holder who is entitled to demand and properly demanded appraisal for such Shares in accordance with Section 1091 of the OGCA), was converted into the right to receive an amount in cash equal to the Offer Price (the “Merger Consideration”), without interest and subject to any required tax withholding.
Also at the Effective Time: (i) the Rollover Shares owned by the Hamm Family and outstanding prior to the Effective Time were converted into an identical number of newly issued shares of the Company, as the surviving corporation, having identical rights to the previously existing Shares held by such holder, and such converted shares of the surviving corporation were the only capital stock of the surviving corporation outstanding immediately following the Merger; and (ii) the Rollover Shares underlying each unvested restricted stock award (“Company RS Award”) were replaced with a restricted stock unit award covering the same number of shares of the Company, as the surviving corporation, as the number of Shares covered by the Company RS Award immediately prior to the Effective Time that provides the holder of such canceled restricted stock award with the right to receive, for each share of common stock of the surviving corporation, upon vesting of such restricted stock unit, and at the surviving corporation’s sole discretion, a share of the surviving corporation, cash in a substantially equivalent amount, or any combination of the two, in each case, together with any unpaid dividends accrued on such restricted stock award.
The foregoing summary of the Merger Agreement and the transactions contemplated by the Merger Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement attached as Exhibit 2.1 to the Current Report on Form 8-K filed by the Company on October 17, 2022 and incorporated by reference.
| Item 2.01. |
Completion of Acquisition or Disposition of Assets |
On November 22, 2022, the Offer and the Merger were completed as described under “Introductory Note.”
The aggregate consideration paid by Merger Sub in the Offer and the Merger to purchase all outstanding Shares (other than the Shares already owned by the Hamm Family), was approximately $4.2 billion. Continental provided Merger Sub with the necessary funds to fund the Offer and the Merger from its cash on hand, availability under its revolving credit agreement and borrowing capacity under a term loan.
The information contained in the Introductory Note of this Current Report on Form 8-K is incorporated by reference into this Item 2.01.
2