Nikola Initiates Exchange Offer To Buy Romeo Power In All-stock Deal

Nikola Corp. (NKLA), a manufacturer of zero-emission battery-electric and hydrogen-electric vehicles, announced that it commenced an exchange offer on Monday to purchase Romeo Power, Inc. (RMO) through a wholly-owned subsidiary.

It was on August 1 that Nikola and Romeo jointly announced their definitive agreement for around $144 million all-stock transaction.

Under the deal terms, Romeo stockholders will receive 0.1186 of a share of Nikola common stock for each Romeo share. This represents an approximate 4.5 percent pro forma ownership of Nikola.

The proposed exchange ratio represents an approximately 34 percent premium to Romeo's July 29, 2022 closing share price.

The offer will expire at midnight, Eastern Time, at the end of September 26.

The transaction is expected to be completed during the fourth quarter of 2022, subject to majority of stock in tender, and customary closing conditions, including regulatory approval.

Upon the successful completion of the offer, Nikola's new unit will be merged into Romeo. Any remaining shares of Romeo common stock that were not tendered in the exchange offer will be canceled and converted into the right to receive the same consideration as in the exchange offer.

In pre-market activity on the NYSE, Romeo Power shares were gaining around 1.5 percent to trade at $0.68.

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