WhiteHawk Energy has been in pursuit of a merger with PHX Minerals for at least 18 months. (Source: WhiteHawk Energy)
WhiteHawk Energy LLC, seeking to step up pressure to force a merger with PHX Minerals, made public on Oct. 14 an offer to buy PHX for $4 per share. The proposal would values PHX Minerals at roughly $150 million.
The offer represents a 17% premium to PHX’s 30-day volume weighted average price and a 19% premium to its 90-day average price, WhiteHawk said.
PHX shares closed at $3.52 per share on Oct. 14 before shooting up afterrising slightly after markets closed. WhiteHawk has been pursuing PHX Minerals since mid-2023. In August 2023, PHX rejected a stock-for-stock transaction with WhiteHawk and said further discussions would be meritless.
A PHX Minerals did not immediately respond to a request for comment.spokesperson said the company had no comment.
Under the terms of WhiteHawk’s proposal, PHX common stockholders would receive $4 per share in cash from WhiteHawk and qualified stockholders of PHX would have the opportunity to exchange all or a portion of their common shares of PHX for common shares of WhiteHawk, to benefit from the value enhancement of the combined business.
“WhiteHawk’s $4.00 per share offer not only represents a premium to PHX’s 52-week high, but it is also greater than PHX’s closing price on 98% of all trading days since 2021,” WhiteHawk said.
The non-binding offer was reiterated in a letter sent Oct. 14 to Mark Behrman, PHX’s board chairman, “after 18 months of several public and private proposals,” WhiteHawk said.
WhiteHawk said it was making the offer public following months of private conversations in order to bring transparency to the situation and ensure that all stockholders are fully informed and can advocate for an outcome that maximizes value for everyone involved.
WhiteHawk also disclosed that it now owns approximately 2.5% of PHX’s outstanding common stock.
“We are disappointed that PHX has been unwilling to engage with WhiteHawk over the past 18 months, which has forced us to make public this proposal. Over that period of time, we have adjusted our proposals to meet the ever-shifting requests of PHX and provided everything we believe necessary to pursue a value enhancing transaction for all PHX stockholders,” said Daniel C. Herz, WhiteHawk’s chairman and CEO.
Herz said he believes the proposal is in the best interests of all stockholders and to “publicly illuminate the destruction of value, as compared to the opportunity for a sale at a significant premium.”
Herz wrote that since 2020, PHX has “consumed over $40 million of cash G&A, while over that same period returning to stockholders less than $12 million in dividends.”
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