Forest Oil revises deal structure with Sabine, adopts poison pill

Forest Oil (FST -2.1%) and Sabine Oil & Gas revise the terms of their merger agreement so that Sabine will now be acquired by FST, rather than FST merging with a Sabine unit.

FST also adopts a shareholder rights plan, with a 5% trigger on shareholders who have shorted the company's debt; FST says it is concerned that investors with short positions in its debt securities could attempt to negatively influence or manipulate the merger vote in an effort to drive down debt prices.

The revised structure does not alter the economic terms of the all-stock transaction; when the deal is completed, current FST shareholders will own ~26.5% of the combined business, the same as under the original contract.

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