CIMAREX ENERGY CO. Item 8.01 OTHER EVENTS
This Current Report on Form 8-K discloses certain additional information
relating to the anticipated merger of
In connection with the Merger Agreement and the transactions contemplated
thereby, ten putative stockholders of Cimarex filed separate lawsuits against
Cimarex and the Cimarex board. Five of the lawsuits were filed in the
While Cimarex believes that the disclosures set forth in the Proxy Statement comply fully with applicable law, to moot plaintiffs' disclosure claims, to avoid nuisance, potential expense and delay, and to provide additional information to Cimarex's stockholders, Cimarex has determined to voluntarily supplement the Proxy Statement with the below disclosures. Nothing in the below supplemental disclosure shall be deemed an admission of the legal necessity or materiality under applicable law of any of the disclosures set forth herein or in the Proxy Statement. To the contrary, Cimarex denies all allegations in the litigation that any additional disclosure was or is required.
Supplemental Disclosures
The following information supplements the Proxy Statement, and should be read in conjunction with the Proxy Statement, which should be read in its entirety, including the annexes thereto. All page references in the information below are references to pages in the Proxy Statement, and the terms used below have the meanings set forth in the Proxy Statement.
The following sentence is hereby inserted immediately after the first sentence
in the fifth full paragraph on page 106 of the Proxy Statement under the heading
"-Net Asset Value Analyses" (such paragraph beginning with "TPH calculated the
present value, as of
"TPH used the database forecasts and technical adjusted database forecasts for each of Cimarex and Cabot for this analysis as such database forecasts cover the full economic lives of the assets, which is necessary for net asset value analysis."
The first sentence in the sixth full paragraph on page 106 of the Proxy Statement under the heading "-Net Asset Value Analyses" (such paragraph beginning with "TPH calculated estimates of the companies' net asset values by . . .") is hereby amended and restated to read as follows:
"TPH calculated estimates of the companies' net asset values by adding (1) the
present value of the cash flows generated by the estimated proved developed
reserves and undeveloped hydrocarbon resources, plus (2) the present value of
future estimated effects of hedging, minus (3) the present value of future
estimated effects of general and administrative expenses, taxes and non-drilling
and completion capital expenditures and minus (4) net debt (total debt minus
cash and cash equivalents) of
The second sentence in the third full paragraph on page 107 of the Proxy Statement under the heading "-Discounted Cash Flow Analyses" (such paragraph beginning with "TPH calculated the companies' terminal values based on . . .") is hereby amended and restated to read as follows:
"The resulting enterprise values were then adjusted by subtracting Cimarex's and
Cabot's net debt (total debt minus cash and cash equivalents) of
The second sentence in the first full paragraph on page 108 of the Proxy Statement under the heading "-Has/Gets Analysis-NAV Accretion" (such paragraph beginning with "TPH conducted an analysis comparing the per share reference ranges . . .") is hereby amended and restated to read as follows:
"TPH calculated illustrative reference ranges of Cimarex common stock pro forma for the merger by (1) adding the net asset values of Cimarex and Cabot on a standalone basis, (2) adding the Synergies, (3) subtracting the estimated fees and expenses relating to the merger, (4) discounting the unlevered free cash flows at ranges of 7.3% to 8.9% (which we refer to as the "illustrative pro forma range A") and 6.5% to 8.0% (which we refer to as the "illustrative pro forma range B"), (5) dividing the calculated value by approximately 818.5 million shares of Cabot common stock pro forma for the merger, and (6) multiplying the implied per share value ranges from the foregoing calculations by the transaction exchange ratio."
The first sentence in the sixth full paragraph on page 108 of the Proxy Statement under the heading "-Equity Research Analysts' Price Targets" (such paragraph beginning with "TPH reviewed sell-side analyst price targets . . .") is hereby amended and restated to read as follows, with the table below inserted immediately thereafter:
"TPH reviewed the following sell-side analyst price targets per share of Cimarex common stock prepared and published by 25 equity research analysts on or prior toMay 21, 2021 ." Firm Name Target Price Date Barclays Capital Inc. $ 72 5/5/2021 BMO Capital Markets Corp. $ 95 5/12/2021 Capital One Securities, Inc. $ 78 5/19/2021 Cowen and Company, LLC $ 73 5/5/2021 Credit Suisse Securities (USA) LLC $ 82 5/6/2021 Evercore Group, L.L.C. $ 75 5/10/2021 Goldman Sachs & Co. LLC $ 85 5/17/2021 J.P. Morgan Securities LLC $ 75 5/11/2021 KeyBanc Capital Markets Inc. $ 85 5/6/2021 Mizuho Securities USA LLC $ 99 5/17/2021 MKM Partners LLC $ 78 5/11/2021 Morgan Stanley & Co. LLC $ 79 5/19/2021 Piper Sandler & Co. $ 88 5/17/2021 Raymond James & Associates, Inc. $ 102 5/12/2021 Scotia Capital (USA) Inc. $ 85 5/21/2021 Seaport Global Securities LLC $ 85 5/6/2021 Siebert Williams Shank & Co., LLC $ 107 5/13/2021 Stifel, Nicolaus & Company, Incorporated $ 104 5/5/2021 Susquehanna Financial Group, LLLP $ 83 5/7/2021 Truist Securities, Inc. $ 80 5/10/2021 Tudor, Pickering, Holt & Co. $ 84 5/19/2021 US Capital Advisors, LLC $ 112 5/18/2021Wells Fargo Securities, LLC $ 81 5/19/2021 Wolfe Research, LLC $ 87 5/5/2021 Zacks Investment Research, Inc. $ 76 5/19/2021
The first sentence in the first full paragraph on page 109 of the Proxy Statement under the heading "-Equity Research Analysts' Price Targets" (such paragraph beginning with "TPH also reviewed sell-side analyst price targets per share . . .") is hereby amended and restated to read as follows, with the table below inserted immediately thereafter:
"TPH also reviewed the following sell-side analyst price targets per share of Cabot common stock prepared and published by 23 equity research analysts prior toMay 21, 2021 ." Firm Name Target Price Date BMO Capital Markets Corp. $ 19 5/12/2021 Capital One Securities, Inc. $ 24 4/30/2021 Cowen and Company, LLC $ 21 4/29/2021 Credit Suisse Securities (USA) LLC $ 20 5/13/2021 Evercore Group, L.L.C. $ 22 5/10/2021 Goldman Sachs & Co. LLC $ 17.5 5/17/2021 Johnson Rice & Company L.L.C. $ 21 4/30/2021 J.P. Morgan Securities LLC $ 17 5/3/2021 Mizuho Securities USA LLC $ 21 5/17/2021 MKM Partners LLC $ 21 5/3/2021 Morgan Stanley & Co. LLC $ 20 4/19/2021 Morningstar, Inc. $ 24 4/30/2021 Peters & Co. Limited $ 20 4/29/2021 Piper Sandler & Co. $ 20 5/20/2021 Raymond James & Associates, Inc. $ 22 5/3/2021 Scotia Capital (USA) Inc. $ 23 4/29/2021 Siebert Williams Shank & Co., LLC $ 25 5/13/2021 Susquehanna Financial Group, LLLP $ 22 4/30/2021 TD Securities (USA) LLC $ 18 4/30/2021 Tudor, Pickering, Holt & Co. $ 20 5/21/2021Wells Fargo Securities, LLC $ 22 5/19/2021 Wolfe Research, LLC $ 23 5/19/2021 Zacks Investment Research, Inc. $ 18 5/3/2021
The following sentence is hereby inserted immediately after the last sentence in
the fifth full paragraph on page 109 of the Proxy Statement under the heading
"-General" (such paragraph beginning with "
"Since
The following sentence is hereby inserted immediately after the last sentence in
the sixth full paragraph on page 109 of the Proxy Statement under the heading
"-General" (such paragraph beginning with "In addition, the
"Except as may be held in hedge funds, mutual funds and other investment funds
or similar investment vehicles or non-discretionary managed accounts or funds,
since
The following sentence is hereby inserted immediately after the last sentence in the last full paragraph on page 109 of the Proxy Statement under the heading "-General" (such paragraph beginning with "TPH acted as financial advisor to Cimarex in connection with . . ."):
"Other than in connection with its engagement as financial advisor to Cimarex in
connection with the merger, during the two years preceding the date of TPH's
opinion, the
The following sentence is hereby inserted immediately after the last sentence in the first full paragraph on page 124 of the Proxy Statement (such paragraph beginning with "For estimates of the values of the payments and benefits described above that would be payable . . ."):
"None of Cimarex's directors is a party to any severance compensation agreement or is otherwise expected to receive any severance benefits upon termination of their service on the Cimarex board of directors."
The following sentence is hereby inserted immediately after the last sentence in the first full paragraph on page 138 of the Proxy Statement (such paragraph beginning with "At the effective time of the merger, pursuant to the Cabot bylaw amendment . . ."):
"For the avoidance of doubt, the terms of the Cabot bylaw amendment do not
restrict or otherwise limit the right of the Cabot stockholders to remove
directors under
The final sentence in the first full paragraph on page 98 of the Proxy Statement under the heading "Plans to return significant capital stockholders" (such paragraph beginning with "In connection with the transaction, Cimarex and Cabot expect . . .") is hereby amended and restated to read as follows:
"This plan is supported by: (1) the combined business' 3-year cash flow
projection of approximately
The final sentence in the seventh full paragraph on page 100 of the Proxy Statement under the heading "Lack of asset overlap" (such paragraph beginning with "The Cimarex board considered the fact that the asset bases of Cimarex and Cabot . . .") is hereby amended and restated to read as follows:
"The Cimarex board determined that the operational excellence of the combined
business' management team, ability to allocate capital more efficiently across a
wide range of commodity price outcomes, enhanced free cash flow stability,
identified pre-tax cost synergies of
The last sentence on page 121 of the Proxy Statement under the heading "Treatment of Cimarex DSU Awards" (such paragraph beginning with "The merger agreement provides that, at the effective time of the merger, each then outstanding Cimarex DSU award . . .") is hereby amended and restated to read as follows:
"Cimarex DSU awards are held exclusively by one non-employee director and are fully vested based on the same assumptions set forth in "-Quantification of Potential Payments and Benefits to Cimarex's Named Executive Officers in Connection with the Merger" on page 124.Accordingly, there is no acceleration of vesting of any Cimarex DSU award as a result of the merger.
No Offer or Solicitation
This filing is not intended to and shall not constitute an offer to buy or sell
or the solicitation of an offer to buy or sell any securities, or a solicitation
of any vote or approval, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made, except by means of a
prospectus meeting the requirements of Section 10 of the Securities Act. The
Exchange Offers and Consent Solicitations are being made to eligible holders
solely pursuant to the Offering Memorandum and Consent Solicitation Statement
and only to such persons and in such jurisdictions as is permitted under
applicable law (each such term as defined in Cimarex's Current Report on Form
8-K filed on
Additional Information about the Merger and Where to Find It
In connection with the proposed Merger, Cabot filed with the
Participants in the Solicitation
Cabot, Cimarex and certain of their respective directors and executive officers
may be deemed to be participants in the solicitation of proxies in respect of
the proposed Merger. Information about the directors and executive officers of
Cabot, including a description of their direct or indirect interests, by
security holdings or otherwise, is set forth in Cabot's proxy statement for its
2021 Annual Meeting of Stockholders, which was filed with the
Cautionary Statement Regarding Forward-Looking Information
This Current Report on Form 8-K contains certain forward-looking statements
within the meaning of federal securities laws. Words such as anticipates,
believes, expects, intends, plans, outlook, will, should, may and similar
expressions may be used to identify forward-looking statements. Forward-looking
statements are not statements of historical fact and reflect Cabot's and
Cimarex's current views about future events. Such forward-looking statements
include, but are not limited to, statements about the benefits of the proposed
merger involving Cabot and Cimarex, including future financial and operating
results? Cabot's and Cimarex's plans, objectives, expectations and intentions?
the expected timing and likelihood of completion of the transaction? the
expected timing and amount of any future dividends? and other statements that
are not historical facts, including estimates of oil and natural gas reserves
and resources, estimates of future production, assumptions regarding future oil
and natural gas pricing, planned drilling activity, future results of
operations, projected cash flow and liquidity, the achievement of synergies,
business strategy and other plans and objectives for future operations. No
assurances can be given that the forward-looking statements contained in this
communication will occur as projected and actual results may differ materially
from those projected. Forward-looking statements are based on current
expectations, estimates and assumptions that involve a number of risks and
uncertainties that could cause actual results to differ materially from those
projected. These risks and uncertainties include, without limitation, the
ability to obtain the requisite Cabot and Cimarex stockholder approvals? the
risk that an event, change or other circumstances could give rise to the
termination of the proposed merger? the risk that a condition to closing of the
merger may not be satisfied on a timely basis or at all? the length of time
necessary to close the proposed transaction, which may be longer than
anticipated for various reasons? the risk that the businesses will not be
integrated successfully? the risk that the cost savings and any other synergies
from the transaction may not be fully realized or may take longer to realize
than expected? the risk that any announcement relating to the proposed
transaction could have adverse effects on the market price of Cabot's common
stock or Cimarex's common stock? the risk of litigation related to the proposed
transaction? the effect of future regulatory or legislative actions on the
companies or the industry in which they operate, including the risk of new
restrictions with respect to well spacing, hydraulic fracturing, natural gas
flaring or other oil and natural gas development activities? the risk that the
credit ratings of the combined business may be different from what the companies
expect? disruption from the transaction making it more difficult to maintain
relationships with customers, employees or suppliers? the diversion of
management time on merger-related issues? the volatility in commodity prices for
crude oil and natural gas? the continuing effects of the COVID-19 pandemic and
the impact thereof on Cabot's and Cimarex's businesses, financial condition and
results of operations? actions by, or disputes among or between, the
Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. Except to the extent required by applicable law, neither Cabot nor Cimarex undertakes any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.
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