Chesapeake Energy and Southwestern Energy proposed shareholder meetings to decide on merger

The all-stock transaction valued at $7.4 billion was announced January 10 and at the time, the two firms revealed a new company name would be chosen but the firm would remain headquartered in Oklahoma City. While the all-stock deal was valued at more than $7 billion, the estimated combined value of the merger is $24 billion. It would also create one of the largest natural gas production and exploration companies in the nation.

In recent days, the two firms made filings with the U.S. Securities and Exchange Commission concerning the planned shareholders meetings. Both were considered prospectus filings with no specific dates set for the meetings.

“The Chesapeake Special Meeting will be held virtually on            , 2024 at       a.m., Central Time. Shareholders of record at the close of business on            , 2024 (the “Chesapeake Record Date”) are entitled to vote at the Chesapeake Special Meeting. In order to virtually attend the Chesapeake Special Meeting, shareholders must register online at           .” stated the Chesapeake filing.

The dates and times were not included in the filing. But both firms, in announcing their merger a few months ago, indicated the closing was anticipated to be in the second quarter of the year. The filing made it clear that Southwestern Energy would survive the merger as a “direct wholly owned subsidiary of Chesapeake.”

Under the proposed merger, each holder of a share of Southwestern Energy with a par value of $0.01 would conert into the right to receive 0.0867 of a share of Chesapake common stock, par value $0.01 per share.

If the merger wins approval of shareholders it will mean Chesapeake’s shareholders will own approximately 60% of the company, and Southwestern’s shareholders will own the other approximately 40%.

A quorum will need to be present at the shareholders meeting and approval of the merger will require the affirmative vote of holders of a majority of the shares of both companies.

As the Chesapeake SEC filing indicated, the board of directors of both companies approved the merger agreement and recommended that their shareholders for vote “FOR” the Stock Issuance Proposal, “FOR the Advisory Compensation Proposal and “FOR” the adjournment proposal.