HOUSTON,
March 1,
2024 /PRNewswire/ -- Callon Petroleum Company (NYSE:
CPE) ("Callon" or the "Company") today announced that it has
commenced cash tender offers (the "Offers") for any and all of its
8.000% Senior Notes due 2028 (the "2028 Notes") and any and all of
its 7.500% Senior Notes due 2030 (the "2030 Notes" and, together
with the 2028 Notes, the "Notes"), upon the terms and conditions
set forth in the Offer to Purchase and Consent Solicitation
Statement, dated as of March 1, 2024
(as it may be amended or supplemented from time to time, the
"Statement"). The Offers will expire at 11:59 p.m., New York
City time, on March 28, 2024,
unless extended or earlier terminated (as such time may be
extended, the "Expiration Time").
The following table sets forth the material
pricing terms for the Offers:
Title of
Note
|
CUSIP
Numbers
|
ISIN Numbers
|
Principal
Amount
Outstanding
|
U.S. Treasury
Reference
Security
|
Bloomberg
Reference
Page
|
Fixed
Spread (basis
points)
|
Consent
Fee(1)(2)
|
8.000% Senior
Notes due 2028
|
13123XBD3
(144A) /
U1303XAG1
(Reg S)
|
US13123XBD30
(144A) /
USU1303XAG17
(Reg S)
|
$650,000,000
|
UST 3.000% due
7/31/2024
|
FIT 3
|
50
|
$30
|
7.500% Senior
Notes due 2030
|
13123XBF8
(144A) /
U1303XAH9
(Reg S)
|
US13123XBF87
(144A) /
USU1303XAH99
(Reg S)
|
$600,000,000
|
UST 2.875% due
6/15/2025
|
FIT 4
|
50
|
$30
|
________________________________
|
(1)
|
Per
$1,000 principal amount.
|
(2)
|
The
Total Consideration for Notes validly tendered prior to the Consent
Fee Deadline and accepted for
purchase is calculated using the Fixed Spread
and is inclusive of the Consent Fee (as each is defined
below).
|
The Offers are contingent upon, among other
things, the closing of the merger (the "Merger") contemplated by
that certain Agreement and Plan of Merger, dated January 3, 2024 (the "Merger Agreement"), by and
among Callon, APA Corporation, a Delaware corporation ("APA"), and Astro Comet
Merger Sub Corp., a Delaware
corporation and wholly owned, direct subsidiary of APA. Callon will
not be required to accept for purchase any tendered Notes or
delivered Consents (as defined below) or pay the Total
Consideration or the Tender Offer Consideration (as each is defined
below), as applicable, if the Merger is not consummated on or prior
to the settlement date (the "Merger Condition"). The consummation
of the Offers is also conditioned upon receipt of the Requisite
Consents (as defined below) (the "Requisite Consents Condition").
There is no assurance that the Offers will be subscribed for in any
amount.
Holders who validly tender (and do not validly
withdraw) their Notes at or prior to 5:00
p.m., New York City time,
on March 14, 2024 (the "Consent Fee
Deadline"), and whose Notes are accepted for purchase, are eligible
to receive total consideration per $1,000 principal amount of Notes validly tendered
and accepted for purchase equal to the fixed spread plus a yield
based on the bid-side price of the U.S. Treasury Reference
Security, each as specified on the front cover of the Statement
(the "Total Consideration"), which includes a consent fee
of $30 per $1,000 principal amount of the Notes
(the "Consent Fee"), upon satisfaction of all conditions to the
Offers, as applicable. Holders who tender Notes at or prior
to 5:00 p.m., New York City time, on March 14,
2024 (the "Withdrawal Deadline") may withdraw such tender at
any time at or prior to the Withdrawal Deadline. Tenders of Notes
may not be withdrawn after the Withdrawal Deadline, even with
respect to Notes tendered after the Withdrawal Deadline, except in
certain limited circumstances where additional withdrawal rights
are required by law. The Total Consideration and Tender Offer
Consideration, as applicable, will be calculated by the Dealer
Managers at 10:00 a.m., New York City time, on March 15, 2024, unless extended by the
Company.
Holders who validly tender (and do not validly
withdraw) their Notes after the Consent Fee Deadline but at or
prior to the Expiration Time, and whose Notes are accepted for
purchase, will be entitled to receive the Total Consideration less
the Consent Fee (the "Tender Offer Consideration"). Holders who
tender their Notes after the Consent Fee Deadline will not receive
the Consent Fee.
Payments for Notes purchased will include accrued
and unpaid interest from and including the last interest payment
date up to, but not including, the settlement date accepted for
purchase. Provided the Merger Condition and Requisite Consents
Condition have been satisfied and all other conditions to the
Offers have been satisfied or waived (as applicable), settlement
for Notes tendered at or prior to the Expiration Time and accepted
for purchase is expected to occur on April
1, 2024.
In connection with the Offers, the Company is
soliciting (the "Consent Solicitations") consents ("Consents") from
the holders of the Notes for certain proposed amendments (the
"Proposed Amendments") that would, among other things, eliminate
substantially all restrictive covenants and certain of the default
provisions contained in each of the indentures governing the Notes.
A tender of Notes under the procedures described in the Statement
will constitute the consent of such holder of Notes to the Proposed
Amendments. Holders may not deliver Consents without also tendering
their Notes. The Proposed Amendments for each series of Notes
require that the Company accepts for payment validly tendered and
not validly withdrawn Notes representing at least a majority of the
aggregate principal amount of the applicable series of Notes then
outstanding (the "Requisite Consents"). The Proposed Amendments
will not become operative until the settlement date (and in no
event prior to the satisfaction of the Merger Condition). The
Consent Solicitations are being made pursuant to the Statement,
which more fully sets forth the terms and conditions of the Consent
Solicitations.
The Offer and Consent Solicitation for each of
the 2028 Notes and 2030 Notes is being made independently of the
Offer and Consent Solicitation for the other series of Notes, and
the Company reserves the right, subject to applicable law, to
terminate, withdraw, amend or extend the Offer and Consent
Solicitation for any series of Notes without also terminating,
withdrawing, amending or extending the Offer and Consent
Solicitation for any other series of Notes.
The 2028 Notes are callable on or after
August 1, 2024 at a redemption price
of 104.00% and the 2030 notes are callable on or after June 15, 2025 at a redemption price of 103.75%.
The Total Consideration or the Tender Offer Consideration, as
applicable, will be based on a yield to those respective call dates
at those specified redemption prices, as described in the
Statement.
Available Documents and Other Details
MUFG Securities Americas Inc., HSBC Securities
(USA) Inc. and Mizuho Securities
USA LLC are acting as Dealer
Managers for the Offers and Solicitation Agents for the Consent
Solicitations. Capital One Securities, Inc., PNC Capital Markets
LLC and Regions Securities LLC are acting as Co-Dealer Managers for
the Offers and Solicitation Agents for the Consent Solicitations.
Questions regarding the Offers or the Consent Solicitations may be
directed to MUFG Securities Americas Inc. at (212) 405-7481,
HSBC Securities (USA) Inc. at
(212) 525-5552 or Mizuho Securities USA LLC at (212) 205-7736. D.F. King &
Co., Inc. is acting as Information Agent and Tender Agent for the
Consent Solicitations. Requests for copies of the Statement may be
directed to D.F. King by telephone at (800) 791-3320 or by email at
Callon@dfking.com.
None of Company, the Dealer Managers and
Solicitation Agents, the Co-Dealer Managers and Solicitation
Agents, the Tender Agent and Information Agent, the trustee under
the indentures governing the Notes or any of their respective
affiliates is making any recommendation as to whether holders of
the Notes should tender any Notes in response to the Offers and the
Consent Solicitations. Holders must make their own decision as to
whether to participate in the Offers and the Consent Solicitations
and, if so, the principal amount of Notes as to which action is to
be taken.
About Callon Petroleum
Callon Petroleum Company is an independent oil
and natural gas company focused on the acquisition, exploration and
sustainable development of high-quality assets in the Permian Basin
in West Texas.
No Offer or Solicitation in Connection with
Merger
Communications in this press release are for
informational purposes only and are not intended to and do not
constitute an offer to sell or a solicitation of an offer to sell
or the solicitation of an offer to buy any securities or a
solicitation of any vote or approval, in any jurisdiction, in each
case with respect to the Merger and shareholder meeting related
thereto or otherwise, nor shall there be any sale, issuance,
exchange or transfer of the securities referred to in this document
in any jurisdiction in contravention of applicable law. No offer of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as
amended (the "Securities Act").
Additional Information and Where to Find
It
In connection with the Merger, APA has filed with
the SEC a registration statement on Form S-4 (the "Registration
Statement") that includes a joint proxy statement of Callon
and APA and a prospectus of APA (the "Joint Proxy
Statement/Prospectus"). The Registration Statement was
declared effective on February 15,
2024, and APA filed a prospectus on February 16, 2024 and Callon filed a definitive
proxy statement on February 16, 2024.
Callon and APA commenced mailing of the definitive Joint Proxy
Statement/Prospectus to their respective stockholders on or about
February 16, 2024. The
Merger will be submitted to Callon's stockholders and APA's
stockholders for their consideration. Callon and APA may also file
other documents with the SEC regarding the Merger. This press
release is not a substitute for the Registration Statement and
definitive Joint Proxy Statement/Prospectus that has been
filed with the SEC or any other document that Callon or APA has
filed or may file with the SEC and send to Callon's stockholders
and/or APA's stockholders in connection with the Merger. INVESTORS
AND SECURITY HOLDERS OF CALLON AND APA ARE URGED TO READ THE
REGISTRATION STATEMENT AND DEFINITIVE JOINT PROXY
STATEMENT/PROSPECTUS, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM
TIME TO TIME, AND ALL OTHER RELEVANT DOCUMENTS THAT ARE FILED OR
WILL BE FILED WITH THE SEC, CAREFULLY AND IN THEIR ENTIRETY BECAUSE
THEY CONTAIN IMPORTANT INFORMATION ABOUT CALLON, APA, THE MERGER,
THE RISKS RELATED THERETO AND RELATED MATTERS.
Investors and security holders will be able to
obtain free copies of the Registration Statement and definitive
Joint Proxy Statement/Prospectus, as each may be amended or
supplemented from time to time, and all other relevant documents
that are filed or will be filed with the SEC through the website
maintained by the SEC at http://www.sec.gov. Copies of documents
filed with the SEC by Callon will be made available free of charge
on Callon's website at http://www.callon.com under the "Investors"
tab or by contacting Callon's Investor Relations Department at
(281) 589-5200 or IR@callon.com. Copies of documents filed with the
SEC by APA will be available free of charge on APA's website at
https://www.apacorp.com.
Participants in the Proxy Solicitation
Callon, APA and their respective directors and
certain of their executive officers and other members of management
and employees may be deemed, under SEC rules, to be participants in
the solicitation of proxies from Callon's stockholders and APA's
stockholders in connection with the Merger. Information regarding
the executive officers and directors of Callon is included in its
definitive proxy statement for its 2023 annual meeting filed with
the SEC on March 13, 2023 and certain
of its Current Reports on Form 8-K. You can obtain a free copy of
this document at the SEC's website at http://www.sec.gov or by
accessing Callon's website at http://www.callon.com. To the extent
holdings of Callon's securities by such executive officers and
directors have changed since the amounts printed in the definitive
proxy statement for Callon's 2023 annual meeting, such changes have
been or will be reflected on Initial Statements of Beneficial
Ownership on Form 3 or Statements of Changes in Beneficial
Ownership on Form 4 filed with the SEC. Information regarding the
executive officers and directors of APA is included in its
definitive proxy statement for its 2023 annual meeting filed with
the SEC on April 11, 2023 and certain
of its Current Reports on Form 8-K. You can obtain a free copy of
this document at the SEC's website at http://www.sec.gov or by
accessing APA's website at http://www.apacorp.com. To the extent
holdings of APA's securities by such executive officers and
directors have changed since the amounts printed in the definitive
proxy statement for APA's 2023 annual meeting, such changes have
been or will be reflected on Initial Statements of Beneficial
Ownership on Form 3 or Statements of Changes in Beneficial
Ownership on Form 4 filed with the SEC. Investors may obtain
additional information regarding the participants in the
solicitations in connection with the Merger and a description of
their direct and indirect interests, by security holdings or
otherwise, by reading the Registration Statement, the definitive
Joint Proxy Statement/Prospectus and other relevant materials filed
with the SEC regarding the Merger. Stockholders of Callon and APA,
potential investors and other readers should read the definitive
Joint Proxy Statement/Prospectus carefully before making any voting
or investment decisions.
Cautionary Statement Regarding Forward-Looking
Information
Certain statements in this press release
concerning the Merger, including any statements regarding the
expected timetable for completing the Merger, the results, effects,
benefits and synergies of the Merger, future opportunities for the
combined company, future financial performance and condition,
guidance and any other statements regarding Callon's or APA's
future expectations, beliefs, plans, objectives, financial
conditions, assumptions or future events or performance that are
not historical facts are "forward-looking" statements based on
assumptions currently believed to be valid. Forward-looking
statements are all statements other than statements of historical
facts. The words "anticipate," "believe," "ensure," "expect," "if,"
"intend," "estimate," "probable," "project," "forecasts,"
"predict," "outlook," "aim," "will," "could," "should," "would,"
"potential," "may," "might," "anticipate," "likely," "plan,"
"positioned," "strategy," and similar expressions or other words of
similar meaning, and the negatives thereof, are intended to
identify forward-looking statements. The forward-looking statements
are intended to be subject to the safe harbor provided by Section
27A of the Securities Act, Section 21E of the Securities Exchange
Act of 1934, as amended, and the Private Securities Litigation
Reform Act of 1995.
These forward-looking statements involve
significant risks and uncertainties that could cause actual results
to differ materially from those anticipated, including, but not
limited to, failure to obtain the required votes of Callon's
stockholders or APA's stockholders to approve the Merger and
related matters; the risk that a condition to closing of the Merger
may not be satisfied, that either party may terminate the Merger
Agreement or that the closing of the Merger might be delayed or not
occur at all; potential adverse reactions or changes to business or
employee relationships, including those resulting from the
announcement or completion of the Merger; the diversion of
management time on Merger-related issues; the ultimate timing,
outcome and results of integrating the operations of Callon and
APA; the effects of the business combination of Callon and APA,
including the combined company's future financial condition,
results of operations, strategy and plans; the ability of the
combined company to realize anticipated synergies in the timeframe
expected or at all; changes in capital markets and the ability of
the combined company to finance operations in the manner expected;
the effects of commodity price changes; and the risks of oil and
gas activities. Expectations regarding business outlook, including
changes in revenue, pricing, capital expenditures, cash flow
generation, strategies for our operations, oil and natural gas
market conditions, legal, economic and regulatory conditions, and
environmental matters are only forecasts regarding these
matters.
Additional factors that could cause results to
differ materially from those described above can be found in
Callon's Annual Report on Form 10-K for the year ended December 31, 2023, which is on file with the SEC
and available on Callon's website at http://www.callon.com under
the "Investors" tab, and in other documents Callon files with the
SEC, in APA's Annual Report on Form 10-K for the year ended
December 31, 2023, which is on file
with the SEC and available on APA's website at
http://www.apacorp.com under the "Investors" tab, and in other
documents APA files with the SEC, and in the Registration
Statement.
All forward-looking statements speak only as of
the date they are made and are based on information available at
that time. Neither Callon nor APA assumes any obligation to update
forward-looking statements to reflect circumstances or events that
occur after the date the forward-looking statements were made or to
reflect the occurrence of unanticipated events except as required
by federal securities laws. As forward-looking statements involve
significant risks and uncertainties, caution should be exercised
against placing undue reliance on such statements.
CONTACT:
Investor: (281) 589-5200; IR@callon.com
Website: www.callon.com
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SOURCE Callon Petroleum Company