Magnolia Oil & Gas Corporation (NYSE: MGY) (the “Company”) announced
today that it has commenced an exchange offer (the “Offer”) and consent
solicitation (the “Consent Solicitation”) relating to its outstanding
Warrants (as defined below). The purpose of the Offer and Consent
Solicitation is to simplify the Company’s capital structure and reduce
the potential dilutive impact of the Warrants.
The Offer and Consent Solicitation are being made pursuant to a
Prospectus/Offer to Exchange dated June 7, 2019, and the Company’s
Schedule TO, dated June 7, 2019, each of which are filed with the U.S.
Securities and Exchange Commission (the “SEC”) and more fully set forth
the terms and conditions of the Offer and Consent Solicitation. Until
the Expiration Date (as defined below), the Company is offering to
holders of its Warrants the opportunity to receive 0.29 shares of Class
A common stock, par value $0.0001 per share (the “Class A Common Stock”)
of the Company in exchange for each of the outstanding Warrants tendered
by the holder and exchanged pursuant to this Offer. The Offer and
Consent Solicitation are being made to:
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All holders of the Company’s publicly traded warrants (the “Public
Warrants”) to purchase shares of Class A Common Stock that were issued
in connection with the initial public offering (the “IPO”) of TPG Pace
Energy Holdings Corp (the Company’s predecessor). Each Public Warrant
entitles the holder to purchase one share of Class A Common Stock for
a purchase price of $11.50, subject to certain adjustments. The
Company’s Class A Common Stock and Public Warrants are listed on the
NYSE under the symbols “MGY” and “MGY.WS,” respectively. As of June 7,
2019, 21,666,650 Public Warrants were outstanding. Pursuant to the
Offer, the Company is offering an aggregate of 6,283,328 shares of its
Class A Common Stock in exchange for the Public Warrants.
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All holders of the Company’s warrants to purchase shares of Class A
Common Stock that were privately issued in connection with the IPO
based on an exemption from registration under the Securities Act of
1933, as amended (the “Securities Act”), referred to as the “Private
Placement Warrants.” The Private Placement Warrants were originally
issued to TPG Pace Energy Sponsor, LLC (“TPG Sponsor”) and were
subsequently transferred to permitted transferees of TPG Sponsor,
including certain of the Company’s directors and executive officers,
pursuant to a series of distributions. The Private Placement Warrants
entitle the holders to purchase one share of Class A Common Stock for
a purchase price of $11.50, subject to adjustments. The terms of the
Private Placement Warrants are identical to the Public Warrants,
except that such Private Placement Warrants are exercisable for cash
or on a cashless basis and are not redeemable by the Company, in each
case so long as they are still held by the permitted transferees of
TPG Sponsor. The Public Warrants and Private Placement Warrants are
referred to collectively as the “Warrants.” As of June 7, 2019,
10,000,000 Private Placement Warrants were outstanding. Pursuant to
the Offer, the Company is offering up to an aggregate of 2,900,000
shares of the Company’s Class A Common Stock in exchange for the
Private Placement Warrants.
Concurrently with the Offer, the Company is also soliciting consents
from holders of the Warrants to amend the warrant agreement that governs
all of the Warrants to permit the Company to require that each
outstanding Warrant be converted into 0.261 shares of Class A Common
Stock, which is a ratio 10% less than the ratio applicable to the Offer
(such amendment, the “Warrant Amendment”). The Company is conditioning
the adoption of the Warrant Amendment on receipt of the consent of
holders of 50% of the outstanding Public Warrants and 50% of the
outstanding Private Placement Warrants.
Pursuant to a Tender and Support Agreement described in the
Prospectus/Offer to Exchange, holders of approximately 89.9% of the
Private Placement Warrants and 0.7% of the Public Warrants have
committed to participate in the Offer.
The Offer and Consent Solicitation will be open until 11:59 p.m.,
Eastern Standard Time, on July 5, 2019, or such later time and date to
which the Company may extend, as described in the Schedule TO and
Prospectus/Offer to Exchange (the “Expiration Date”). As brokers,
custodians and the processes of The Depository Trust Company may require
action by holders in advance of the Expiration Date in order to
participate in the Offer, holders are urged to consult their broker or
custodian regarding the participation procedures and any additional
deadlines. Tendered Warrants may be withdrawn by holders at any time
prior to such Warrants being accepted by the Company for exchange. The
Company’s obligation to complete the Offer is not conditioned on the
tender of a minimum amount of Warrants. Subject to applicable law, the
Company may amend, extend or terminate the Offer and Consent
Solicitation at any time.
The Company has engaged Deutsche Bank Securities as the Dealer Manager
for the Offer and Consent Solicitation. Any questions or requests for
assistance concerning the Offer and Consent Solicitation may be directed
to Deutsche Bank Securities at 212-250-5600. Morrow Sodali LLC has been
appointed as the Information Agent for the Offer and Consent
Solicitation, and Continental Stock Transfer & Trust Company has been
appointed as the Exchange Agent.
Important Additional Information Has Been Filed with the SEC
Copies of the Schedule TO and Prospectus/Offer to Exchange will be
available free of charge at the website of the SEC at www.sec.gov.
Requests for documents may also be directed to Morrow Sodali LLC,
toll-free at (800) 662-5200 (banks and brokerage firms, please call
(203) 658-9400).
A registration statement on Form S-4 relating to the securities to be
issued in the Offer has been filed with the SEC but has not yet become
effective. Such securities may not be sold nor may offers to buy be
accepted prior to the time the registration statement becomes effective.
This announcement is for informational purposes only and shall not
constitute an offer to purchase or a solicitation of an offer to sell
the Warrants or an offer to sell or a solicitation of an offer to buy
any shares of Class A Common Stock. The Offer and Consent Solicitation
are being made only through the Schedule TO and Prospectus/Offer to
Exchange, and the complete terms and conditions of the Offer and Consent
Solicitation are set forth in the Schedule TO and Prospectus/Offer to
Exchange. Holders of the Warrants are urged to read the Schedule TO
and Prospectus/Offer to Exchange carefully before making any decision
with respect to the Offer and Consent Solicitation because they contain
important information, including the various terms of, and conditions
to, the Offer and Consent Solicitation. None of the Company, or any
of its management or its board of directors, or the Information Agent,
the Exchange Agent or the Dealer Manager makes any recommendation as to
whether or not holders of Warrants should tender Warrants for exchange
in the Offer or consent to the Warrant Amendment in the Consent
Solicitation.
About the Company
The Company is a publicly traded oil and gas exploration and production
company with operations primarily in South Texas in the core of the
Eagle Ford. The Company focuses on generating value for shareholders
through steady production growth, strong pre-tax margins, and free cash
flow.
Forward looking statements
The information in this press release includes forward-looking
statements within the meaning of Section 27A of the Securities Act and
Section 21E of the Securities Exchange Act of 1934, as amended. All
statements other than statements of present or historical fact included
in this press release are forward looking statements. When used in this
press release, the words “could”, “should”, “will”, “may”, “believe”,
“anticipate”, “intend”, “estimate”, “expect”, “ project,” the negative
of such terms and other similar expressions are intended to identify
forward-looking statements, although not all forward-looking statements
contain such identifying words. These forward-looking statements are
based on the Company’s current expectations and assumptions about future
events and are based on currently available information as to the
outcome and timing of future events. Except as otherwise required by
applicable law, the Company disclaims any duty to update any
forward-looking statements, all of which are expressly qualified by the
statements in this section, to reflect events or circumstances after the
date of this press release. The Company cautions you that these
forward-looking statements are subject to various risks and
uncertainties, including those described under the section entitled
“Risk Factors” in the Company’s Registration Statement on Form S-4,
filed June 7, 2019, as such factors may be updated from time to time in
the Company’s periodic filings with the SEC, which are available
publicly on the SEC’s website at www.sec.gov.
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