EQT Corp. (NYSE: EQT) and Rice Energy Inc. (NYSE: RICE) announced a definitive merger agreement Monday morning under which EQT will acquire all outstanding shares of Rice common stock in a stock and cash deal valued at $6.7 billion. EQT also will assume about $1.5 billion in Rice Energy debt and preferred equity.
Both companies are natural gas producers with large acreage positions in the Marcellus, Utica and Upper Devonian shale plays in Ohio, Pennsylvania and West Virginia. Following the merger, the combined company will hold approximately 1.5 million core acres and more than 8,600 undeveloped drilling locations.
Rice Energy shareholders will receive 0.37 shares of EQT stock and $5.30 in cash for each share of Rice common stock they own. At EQT’s Friday closing price of $58.77, that amounts to about $27.05 per share. That represents a premium of about 37.4% to Rice’s Friday closing price of $19.69.
As part of the agreement, EQT will also receive Rice Energy’s midstream assets, including a 92% interest in Rice Midstream GP Holdings, which owns 100% of the general partner incentive distribution rights and 28% of the limited partnership interests in Rice Midstream Partners L.P. (NYSE: RMP) and retained midstream assets held by Rice Energy. EQT intends to effect a drop-down transaction of the retained midstream assets — valued at around $130 million — to its own midstream master limited partnership, EQT Midstream Partners L.P. (NYSE: EQM).
The transaction requires the approval of shareholders in both companies and usual and customary closing conditions. The deal is expected to close in the fourth quarter of this year.
Shares of Rice Energy traded up about 25.5% Monday morning, at $24.59 in a 52-week range of $18.30 to $29.36.
EQT shares traded down more than 9% to $53.35, in a 52-week range of $52.67 to $80.61. The 12-month consensus price target on the shares is $77.95.
In 20 Years, I Haven’t Seen A Cash Back Card This Good
After two decades of reviewing financial products I haven’t seen anything like this. Credit card companies are at war, handing out free rewards and benefits to win the best customers.
A good cash back card can be worth thousands of dollars a year in free money, not to mention other perks like travel, insurance, and access to fancy lounges.
Our top pick today pays up to 5% cash back, a $200 bonus on top, and $0 annual fee. Click here to apply before they stop offering rewards this generous.
Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
