Blue Ridge Mountain Resources’ Merger With Eclipse Resources

Jefferies LLC is acting as financial advisor to Eclipse Resources, and Norton Rose Fulbright US LLP is acting as legal advisor to Eclipse Resources. Vinson & Elkins LLP is acting as legal advisor to EnCap Investments, the majority stockholder of Eclipse Resources. Barclays is acting as financial advisor to Blue Ridge, and Bracewell LLP is acting as legal advisor to Blue Ridge.

Eclipse Resources Corporation (NYSE:ECR) and Blue Ridge Mountain Resources, Inc. (OTCPK: BRMR) have entered into a definitive merger agreement under which Eclipse Resources and Blue Ridge will combine in an all-stock transaction. In the Transaction, Blue Ridge stockholders will receive consideration consisting of 4.4259 shares of Eclipse Resources common stock for each share of Blue Ridge common stock, before adjustment for a 15-to-1 reverse stock split of Eclipse Resources common stock to be effected concurrently with closing of the Transaction. Based on the closing price of Eclipse Resources common stock on August 24, 2018, the Transaction implies an enterprise value for the combined company of approximately $1.4 billion and an equity value of approximately $908 million1. The Transaction has been unanimously approved by the board of directors of each company, and has been approved by the written consent of stockholders of Eclipse Resources holding a majority of the outstanding common shares of Eclipse Resources. Stockholders of Blue Ridge owning approximately 60% of the outstanding common shares of Blue Ridge have entered into a voting agreement with both companies to, among other things, vote or provide written consents in favor of approval of the Transaction, subject to certain terms and conditions.

Under the terms of the Transaction, a newly-formed subsidiary of Eclipse Resources will be merged into Blue Ridge, with Blue Ridge surviving as a wholly-owned subsidiary of Eclipse Resources. In the merger, Blue Ridge stockholders will receive 4.4259 shares of Eclipse Resources common stock for each share of Blue Ridge common stock held by them, representing consideration to each Blue Ridge stockholder of $7.44 per share based on the closing price of Eclipse Resources common stock on August 24, 2018. The exchange ratio will be adjusted to reflect a 15-to-1 reverse stock split of the Eclipse Resources common stock to be effected concurrently with closing of the Transaction. Upon closing of the Transaction, existing Eclipse shareholders will own approximately 57.5% of the outstanding shares of the combined company and Blue Ridge shareholders will own approximately 42.5%.

EnCap Investments, owning collectively approximately 57% of the outstanding shares of common stock of Eclipse Resources, have entered into a voting agreement with Eclipse Resources and Blue Ridge to, among other things, provide the written consents approving the Transaction, which have been delivered by them concurrently with the signing of the merger agreement.

Certain stockholders of Blue Ridge owning approximately 60% of the outstanding shares of common stock of Blue Ridge have entered into a voting agreement with Eclipse Resources and Blue Ridge to, among other things, vote or provide written consents in favor of approval of the Transaction, subject to certain terms and conditions.

The Transaction is expected to close in the fourth quarter of 2018 and is subject to customary regulatory approvals, approval by the holders of a majority of Blue Ridge common stock, and certain other customary closing conditions.

Bracewell Blue Ridge Mountain Resources, Inc. (OTCPK: BRMR) with a team including Charles H. Still Jr. (Picture), Bruce R. Jocz, Carl von Merz, Elizabeth L. McGinley, Rebecca L. Baker, Heather L. Brown, Michele J. Alexander, Daniel E. Hemli, Jacqueline R. Java, Jonathan L. Seliger, Kathy Witty Medford, Jay N. Larry, Catherine B. Engell, Shannon M. Rice, John L. Stavinoha III and Hobie Temple.

Vinson & Elkins advised EnCap Investments with a team including Matt Strock and Steve Gill and senior associate Gabe Nwuli, with assistance from partner James Garrett. Also advising were partners Stephen Jacobson and John Lynch and associate Steven Oyler.

 

Involved fees earner: Charles Still – Bracewell; Carl von Merz – Bracewell; Jonathan Seliger – Bracewell; Kathy Witty Medford – Bracewell; Jay Larry – Bracewell; Shannon Rice – Bracewell; John Stavinoha – Bracewell; Hobie Temple – Bracewell; Bruce Jocz – Bracewell; Rebecca Baker – Bracewell; Elizabeth McGinley – Bracewell; Michele Alexander – Bracewell; Catherine Engell – Bracewell; Heather Brown – Bracewell; Daniel Hemli – Bracewell; Jacqueline Java – Bracewell; Matthew Strock – Vinson & Elkins LLP; Stephen Gill – Vinson & Elkins LLP; Gabriel Nwuli – Vinson & Elkins LLP; James Garrett – Vinson & Elkins LLP; Stephen Jacobson – Vinson & Elkins LLP; Steven Oyler – Vinson & Elkins LLP; John Edward Lynch – Vinson & Elkins LLP;

Law Firms: Bracewell; Vinson & Elkins LLP;

Clients: EnCap Investments LP ; Blue Ridge Mountain Resources Inc;

 

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Author: Ambrogio Visconti