Forest Oil (NYSE:FST) +8.8% AH on news it agrees to sell its natural gas properties located in the Arkoma Basin to an unnamed buyer for ~$185M.
The transaction is not related to FST's pending merger with Sabine Oil & Gas, and Sabine has given its consent to the sale; FST has scheduled the special shareholder meeting for Nov. 20 to vote on the proposed combination.
Forest Oil (NYSE:FST) says it completed the audit procedures which caused a delay in filing its latest 10-Q, with no changes to previously reported financial results.
FST files amended 2013 10-K and Q1 and Q2 2014 quarterly reports on form 10-Q with no changes to the financial statements; disclosures include a "going concern" opinion due to the fact that, as previously disclosed, FST has determined that by year-end 2014 the ratio of its total debt to EBITDA may exceed the maximum allowed under its bank credit facility.
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.
Sabine CEO David Sambrooks refutes yesterday's report that the $850M bridge financing facility was pulled, and says the financing commitment needed for the transaction with FST remains in place and unchanged.