Item 1.01 Entry into a Material Definitive Agreement.
On
The Merger Agreement provides that, among other things and subject to the terms
and conditions of the Merger Agreement, at the effective time of the Merger (the
"Effective Time"), (a) Merger Sub will be merged with and into the Partnership
(the "Merger"), with the Partnership surviving and continuing as the surviving
entity in the Merger and (b) each issued and outstanding publicly held common
unit representing a limited partner interest in the Partnership (each, a "Common
Unit") (other than any Common Units owned by the Company and its subsidiaries)
(each, a "Public Common Unit") will be converted into the right to receive 0.113
of a share of common stock, par value
The Merger Agreement also specifies the treatment of outstanding Partnership equity awards in connection with the Merger, which shall be treated as follows at the Effective Time: (a) each Partnership Phantom Unit (as defined in the Merger Agreement), other than Director Phantom Units (as defined in the Merger Agreement), that is outstanding immediately prior to the Effective Time, will cease to relate to or represent any right to receive Common Units and will be converted, at the Effective Time, into an award of Parent RSUs (as defined in the Merger Agreement), as adjusted by the Exchange Ratio, and with such Parent RSUs otherwise on the same terms and conditions as were applicable to the corresponding Partnership Phantom Units, including any applicable payment timing provisions and distribution equivalent rights, as applicable (and, if applicable, dividend equivalent rights relating to dividends declared with respect to Common Stock during the period beginning at the Effective Time and ending on the date of settlement of such Parent RSU) and (b) each Director Phantom Unit will become fully vested and will be automatically converted into the right to receive, with respect to each Common Unit subject thereto, the Merger Consideration plus any accrued but unpaid amounts in relation to distribution equivalent rights (and, if applicable, dividend equivalent rights relating to dividends declared with respect to Common Stock during the period beginning at the Effective Time and ending on the date of settlement of such Director Phantom Unit).
At the Effective Time, (a)
The Conflicts Committee (the "Conflicts Committee") of the board of directors of
the General Partner (the "GP Board") has (a) unanimously determined that the
Merger Agreement and the transactions contemplated thereby, including the
Merger, are not adverse to the interest of the Partnership, including the
holders of Public Common Units, and (b) approved the Merger Agreement and the
transactions contemplated thereby, including the Merger, with such approval by
the Conflicts Committee constituting "Special Approval" for all purposes of the
First Amended and Restated Agreement of Limited Partnership of the Partnership,
dated
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The GP Board (acting upon the recommendation of the Conflicts Committee) has unanimously (a) determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are not adverse to the interest of the Partnership, including the holders of Public Common Units, (b) authorized and approved the execution, delivery and performance of the Merger Agreement and the transactions contemplated thereby, including the Merger, (c) directed that the Merger Agreement be submitted to a vote of the Limited Partners and (d) authorized the Limited Partners to act by written consent pursuant to the terms of the Partnership Agreement.
Contemporaneously with the execution of the Merger Agreement, E&P, in its capacity as the record and beneficial holder of 107,815,152 issued and outstanding Class B units in the Partnership, constituting a "Unit Majority" (as defined in the Partnership Agreement), delivered its written consent approving the Merger Agreement and the transactions contemplated thereby, including the Merger (the "Written Consent"). As a result, no other vote or consent of the Limited Partners is required to approve the Merger and the other transactions contemplated by the Merger Agreement.
The Merger Agreement contains customary representations and warranties from the parties, and each party has agreed to customary covenants, including, among others, covenants relating to (a) the conduct of business during the interim period between the execution of the Merger Agreement and the Effective Time and (b) the obligation to use reasonable best efforts to cause the Merger to be consummated.
The completion of the Merger is subject to certain customary closing conditions, including, among others, (a) the Written Consent not having been amended, modified, withdrawn, terminated or revoked, (b) there being no law, injunction or judgment prohibiting consummation of the transactions contemplated under the Merger Agreement, (c) the effectiveness of a registration statement on Form S-4 relating to the shares of Common Stock to be issued as Merger Consideration, (d) authorization for listing on Nasdaq of the shares of Common Stock to be issued as Merger Consideration, (e) subject to specified materiality standards, the accuracy of certain representations and warranties of each party and (f) compliance by each party in all material respects with its covenants.
The Merger Agreement provides for certain termination rights for both the Company and the Partnership, including in the event that (a) the parties agree . . .
Item 5.07. Submission of Matters to a Vote of Securityholders.
Under the terms of the Partnership Agreement, the approval of the Merger Agreement and the Merger require the affirmative vote or consent of the holders of a "Unit Majority" (as defined in the Partnership Agreement). Concurrently with the execution of the Merger Agreement, E&P, which as of the date of the Merger Agreement held 107,815,152 issued and outstanding Class B units representing limited partner interests in the Partnership, constituting a Unit Majority, delivered the Written Consent. The Written Consent was sufficient to approve the Merger Agreement and the transactions contemplated thereby, including the Merger.
Item 8.01. Other Events.
On
Item 9.01 Financial Statements and Exhibits.
Exhibit Number Exhibit 2.1* Agreement and Plan of Merger, dated as ofMay 15, 2022 , by and amongDiamondback Energy, Inc. ,Rattler Midstream GP LLC ,Bacchus Merger Sub Company andRattler Midstream LP 99.1 Press release, datedMay 16, 2022 , entitled "Diamondback Energy, Inc. Announces Agreement to Acquire Publicly Held Units ofRattler Midstream LP " 104 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document
* The schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K
and will be provided to the
CAUTIONARY STATEMENTS REGARDING FORWARD LOOKING STATEMENTS
This report contains "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, which involve risks, uncertainties, and assumptions. All statements, other than statements of historical fact, including statements regarding the Company's and the Partnership's: future performance; business strategy; future operations; estimates and projections of revenues, losses, costs, expenses, returns, cash flow, and financial position; anticipated benefits of strategic transactions (including acquisitions and divestitures); and plans and objectives of management (including plans for future cash flow from operations) are forward-looking statements. These statements also include, but are not limited to, statements regarding: the expected benefits of the proposed transaction to the Company and the Partnership and their shareholders and unitholders, respectively, the anticipated completion of the proposed transaction and the timing thereof. When used in this news release, the words "aim," "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "future," "guidance," "intend," "may," "model," "outlook," "plan," "positioned," "potential," "predict," "project," "seek," "should," "target," "will," "would," and similar expressions (including the negative of such terms) as they relate to the Company and the Partnership are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Although the Company and the Partnership each believes that the expectations and assumptions reflected in its forward-looking statements are reasonable as and when made, they involve risks and uncertainties that are difficult to predict and, in many cases, beyond the Company's and the Partnership's control. Accordingly, forward-looking statements are not guarantees of future performance and the Company's and the Partnership's actual outcomes could differ materially from what the Company and the Partnership have expressed in their forward-looking statements.
Factors that could cause the outcomes to differ materially include (but are not
limited to) the following: changes in supply and demand levels for oil, natural
gas, and natural gas liquids, and the resulting impact on the price for those
commodities; the impact of public health crises, including epidemic or pandemic
diseases such as the COVID-19 pandemic, and any related company or government
policies or actions; actions taken by the members of
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In light of these factors, the events anticipated by the Company's and the Partnership's forward-looking statements may not occur at the time anticipated or at all. Moreover, the Company and the Partnership each operates in a very competitive and rapidly changing environment and new risks emerge from time to time. Neither the Company nor the Partnership can predict all risks, nor can they assess the impact of all factors on their respective businesses or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those anticipated by any forward-looking statements they may make. Accordingly, you should not place undue reliance on any forward-looking statements made in this news release. All forward-looking statements speak only as of the date of this news release or, if earlier, as of the date they were made. Neither the Company nor the Partnership intends to, and each disclaims any obligation to, update or revise any forward-looking statements unless required by applicable law.
IMPORTANT INFORMATION FOR INVESTORS; ADDITIONAL INFORMATION AND WHERE TO FIND IT
This report does not constitute an offer to sell or the solicitation of an offer
to buy any securities or a solicitation of any vote or approval, 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. In
connection with the proposed transaction, the Company intends to file with the
INVESTORS AND SECURITY HOLDERS OF THE COMPANY AND THE PARTNERSHIP ARE URGED TO READ THE REGISTRATION STATEMENT, INFORMATION STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT MAY BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Investors and security holders will be able to obtain free copies of these
documents (if and when available) and other documents containing important
information about the Company and the Partnership, once such documents are filed
with the
PARTICIPANTS IN THE SOLICITATION
The Company, the Partnership, the directors and executive officers of the
Company and the General Partner, as applicable, and certain other persons may be
deemed to be participants in the solicitation of proxies and consents in respect
of the proposed transaction. Information regarding the directors and executive
officers of the Company is available in its definitive proxy statement for its
2022 annual meeting, filed with the
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