MCEP stock plunges after an investigation is being conducted for possible breaches of the limited partnership agreement in connection with the Partnership’s proposed all-stock merger with Contango.
Shares of Mid-Con Energy Partners, LP (MCEP) are plunging during the earlier morning on Tuesday as the stock has kicked off the session dipping up to 8%. In an announcement on October 26, the company reported that it has entered into an all-stock merger agreement with Contango Oil & Gas Company.
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WeissLaw LLP has initiated an investigation upon possible infringements of the merger deal and other violations of the law by the Board of Directors (BoDs) of MCEP.
Under the merger agreement terms, Mid-Con unitholders are subject to receive 1.75 common stock shares of Contango for each of MCEP common unit owned, a 5% premium based on a 15-day volume weighted average price. The following exchange ratio involves an enterprise value for the combined entity in excess of $400 million based upon Contango’s $2.76 closing price on Oct. 26, 2020.
With the completion of the merger, Contango shareholders will hold almost 87% of the merged company and Mid-Con unitholders will hold around 13% of the merged company.
The Chairman of Mid-Con’s BoDs, Bob Boulware commented that they are satisfied with what they are providing their unitholders through this merger deal. It also brings an opportunity for them to fancy an attractive exchange ratio to own a company which is larger and better capitalized. Boulware further added:
“This merger was negotiated by our conflicts committee, which determined, with the advice of its financial and legal advisors, that the consideration offered in the merger is fair, from a financial point of view to Mid-Con’s unaffiliated public unitholders.”
The transaction is anticipated to close in late 2020 or early 2021. The merger agreement has already been approved unanimously by the conflicts committee of BoDs of Mid-Con and disinterested directors of BoDs of Contango.
In addition, the voting agreements of more than 50% holders from both the firms have also been signed.
With all the things seeming good for both the company’s, WeissLaw LLP has jumped in to safeguard the rights of the shareholders of Mid-Con.
Investigation by WeissLaw
WeissLaw LLP is one of the nation’s premier law firms representing investors and consumers in class and derivative litigation. The company will be investigating the potential infringements of the merger agreement, breaches of fiduciary duty, and other violations of law by the Board members of Mid-Con.
The company has held an inquiry against Energy Partners, LP (MCEP) that whether MECP’s Board has done a fair deal considering the interests of its public unitholders in agreeing to the proposed transaction.
WeissLaw will investigate the terms of the agreement which include the implied per-unit consideration, and other sales and financial analyses, that whether all the information will be fully and fairly disclosed to the firm’s public unitholders.