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Cimarex Energy to acquire Resolute for $1.6 billion

Staff Writer |
Cimarex and Resolute Energy Corporation announced that Cimarex has entered into a definitive agreement to acquire Resolute in a cash and stock transaction valued at $35.00 per share, or a total purchase price of approximately $1.6 billion, including Resolute's long term debt of $710 million, as of September 30, 2018.

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The transaction was unanimously approved by both companies' Boards of Directors.

Under the terms of the definitive merger agreement, Resolute shareholders will have the right to receive 0.3943 shares of Cimarex common stock, $35 per share in cash, or a combination of $14 per share in cash and 0.2366 share of common stock. The amount of stock and cash is subject to proration for total stock and cash mix of 60% and 40%, respectively.

The consideration represents an approximate 14.8% percent premium to Resolute's closing price of $30.49 on November 16, 2018. Upon closing of the transaction, Cimarex shareholders will own approximately 94.4% of the combined company, and Resolute shareholders will own approximately 5.6%. The transaction, which is expected to be completed by the end of the first quarter of 2019, is subject to the approval of Resolute shareholders, and the satisfaction of certain regulatory approvals and other customary closing conditions.

The cash portion of the transaction is expected to be funded through a combination of cash on hand (including proceeds from the previously announced sale of assets in Ward County, Texas) and borrowings under Cimarex's revolving credit facility.

Upon closing, the Board of Directors and executive team of Cimarex will remain unchanged. The resulting capital structure is consistent with Cimarex's strategy of maintaining a conservative financial position and is expected to have no impact on the company's investment grade credit rating.

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