Forest Oil Expects to Close Purchase of Houston Exploration for $750M and 24M Shares

Natural gas and crude oil producer Forest Oil Corp. said it expects to close its $1.5 billion cash-and-stock acquisition of Houston Exploration Co. on Wednesday.

The company also said the stock component of the deal is over-subscribed based on preliminary election results.
Forest expects to pay about $750 million in cash to Houston stockholders and issue about 24 million shares of Forest common stock, based on the estimated 28.6 million shares of Houston outstanding on Tuesday and the preliminary election results.

Due to the oversubscription, the elections will be subject to proration procedures laid out in the merger agreement. Houston stockholders who elected to receive their merger consideration in Forest shares will receive a combination of cash and stock. Shareholders who asked to receive all cash and all stockholders who failed to make a valid election will receive $60.02 per share.

The final amounts will be determined after the results of the election are fully calculated.

Houston shares dropped $1.42, or 2.3 percent, in premarket trading to $60.11, after closing at $61.53 on Tuesday. Forest Oil shares gained 1 cent to $42.05 in premarket trading, after closing at $42.04 on Tuesday.

Source : biz.yahoo.com