Denbury Closes Encore Acquisition; Announces New $1.6 Bln Credit Facility - Update

(RTTNews) - Oil and gas company Denbury Resources Inc. (DNR: News ) Wednesday announced the closing of its acquisition of Encore Acquisition Co. (EAC: News ). Denbury also entered into a new $1.6 billion 24-bank credit facility and briefly extended its tender offers for Encore senior subordinated notes.

The company stated that the merger closed Tuesday evening following approval by the stockholders of both Denbury and Encore at meetings held in the morning and subsequent completion of closing documentation. In the merger, Denbury issued approximately 134.4 million shares of its common stock and paid approximately $829.4 million in cash to Encore stockholders.

The number of Denbury shares issued to Encore public holders represents an exchange ratio of 2.4048 Denbury shares and $15 in cash for each previously outstanding share of Encore common stock, based on an overall 30% cash and 70% stock pro ration of the overall consideration, subject to different ratios for all-cash and all-stock elections made by Encore stockholders. The Denbury shares issued to Encore stockholders will represent approximately 33.9% of Denbury's issued and outstanding common stock after the merger, based upon Denbury shares outstanding at January 31.

Denbury said that with the merger it becomes one of the largest oil-focused independent oil and natural gas companies in the U.S. The combined company will continue to be known as Denbury Resources Inc. with headquarters in Plano, Texas. Trading in Encore's common stock on the New York Stock Exchange has been terminated after market close on March 9.

In the merger, J.P. Morgan Securities Inc. acted as exclusive financial advisor to Denbury and Barclays Capital Inc. acted as exclusive financial advisor to Encore.

Baker & Hostetler LLP acted as counsel to Denbury, and Baker Botts L.L.P. and Latham & Watkins LLP was the counsel to Encore.

Further, Denbury announced its intention to accept for purchase all of Encore's senior subordinated notes tendered by holders pursuant to cash tender offers and related consent solicitations commenced on February 8 for $600 million aggregate principal amount of three series of outstanding Encore senior subordinated notes.

The company stated that as of 5:00 p.m. Eastern Time on March 9, tenders and consents had been received with respect to $108.22 million aggregate principal amount, or 72%, of Encore's outstanding 6.25% Senior Subordinated Notes due 2014. The company has also received tenders and consents with respect to $268.80 million aggregate principal amount, or 90%, of Encore's outstanding 6.0% Senior Subordinated Notes due 2015, and $123.52 million aggregate principal amount, or 82%, of Encore's outstanding 7.25% Senior Subordinated Notes due 2017.

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