CANONSBURG, Pa., Oct. 23, 2020 /PRNewswire/ -- CONSOL Energy
Inc. (NYSE: CEIX) ("CEIX") and CONSOL Coal Resources LP (NYSE: CCR)
("CCR") today announced that they have entered into a definitive
merger agreement pursuant to which CEIX will acquire all of the
publicly held CCR common units in an all-stock transaction valued
at approximately $34.4
million, based on the most recent closing price of
shares of CEIX common stock.
Under the merger agreement, CEIX will acquire all of the
approximately 10.9 million outstanding CCR common units that
it does not already own at a fixed exchange ratio of 0.73 shares of
CEIX common stock for each publicly held CCR common unit. This
exchange ratio represents a 2.1% premium to the volume weighted
average exchange ratio during the 20 trading days ended
October 22, 2020. In aggregate, CEIX
will issue approximately 8.0 million shares in connection with the
proposed transaction, representing approximately 22.2% of the total
CEIX shares that will be outstanding on a pro forma basis.
"We are extremely excited to announce this transaction, as we
believe it will provide significant benefits for both CEIX and CCR
stakeholders" said Jimmy Brock,
President and Chief Executive Officer of CONSOL Energy Inc. "We
firmly believe these two companies are a much healthier entity once
consolidated than they would be on a standalone basis, regardless
of the circumstance. Simplifying the structure will bring immediate
benefits to the combined entity such as improving its consolidated
credit metrics, creating financial flexibility and eliminating dual
public company costs. In the longer term, we expect this
transaction will improve the creditworthiness of the combined
entity, while also enhancing capital market access and trading
liquidity. Finally, this merger accelerates our ability to return
capital to our shareholders."
Additional Transaction Terms and Details
The
transaction terms were negotiated, reviewed and approved by the
conflicts committee of the board of directors of CCR's general
partner and the board of directors of CCR's general partner. The
CCR conflicts committee is composed of the independent members of
the board of directors of CCR's general partner. The board of
directors of CEIX also approved the merger agreement.
Subject to customary approvals and conditions, the transaction
is expected to close in the first quarter of 2021. The transaction
is subject to majority approval by CCR's common unitholders,
approval by CEIX's stockholders and the effectiveness of a
registration statement related to the issuance of the new CEIX
shares to CCR's common unitholders. Pursuant to a support agreement
entered into in connection with the transaction, CEIX has
agreed to vote all of the CCR common units that it owns in
favor of the transaction. CEIX currently owns approximately
60.7% of the outstanding CCR common units.
In connection with the closing of the transaction, CCR's common
units will cease to be publicly traded and the incentive
distribution rights in CCR will be eliminated.
Citi and Credit Suisse Securities (USA) LLC are acting as financial advisors and
Latham & Watkins LLP is acting as legal advisor to CEIX.
Intrepid Partners, LLC is acting as financial advisor and Sidley
Austin LLP is acting as legal advisor to the CCR conflicts
committee.
Conference Call Details
CEIX and CCR will host a live
webcast on October 23, 2020 to
discuss the transaction. The call will begin at 8:30 a.m. Eastern Time followed by a live Q&A
session with management.
To access the webcast, please visit the "Investors" page of
CEIX's website at www.consolenergy.com or the "Investors" page
of CCR's website at www.ccrlp.com. Any presentation materials will
be available on each company's website.
Alternatively, the call and Q&A can be accessed as
follows:
- Participant dial-in (toll-free): 1-877-226-2859
Participant dial-in (international): 1-412-542-4134
- Reference: "CONSOL Energy Inc. call"
A replay of the call will be available on CEIX's website for
approximately 365 days.
About CONSOL Energy Inc.
CONSOL Energy Inc. (NYSE:
CEIX) is a Canonsburg,
Pennsylvania-based producer and exporter of high-Btu
bituminous thermal and crossover metallurgical coal. It owns and
operates some of the most productive longwall mining operations in
the Northern Appalachian Basin. Our flagship operation is the
Pennsylvania Mining Complex, which has the capacity to produce
approximately 28.5 million tons of coal per year and is comprised
of 3 large-scale underground mines: Bailey, Enlow Fork, and Harvey.
The company also owns and operates the CONSOL Marine Terminal,
which is located in the port of Baltimore and has a throughput capacity of
approximately 15 million tons per year. In addition to the ~669
million reserve tons associated with the Pennsylvania Mining
Complex and the ~21 million reserve tons associated with the Itmann
project, the company also controls approximately 1.5 billion tons
of greenfield thermal and metallurgical coal reserves located in
the major coal-producing basins of the eastern United States. Additional information
regarding CEIX may be found at www.consolenergy.com.
About CONSOL Coal Resources LP
CONSOL Coal Resources
(NYSE: CCR) is a master limited partnership formed in 2015 to
manage and further develop all of CONSOL Energy Inc.'s (NYSE: CEIX)
active coal operations in Pennsylvania. CCR's assets include a 25%
undivided interest in, and operational control over, the
Pennsylvania Mining Complex, which consists of three underground
mines—Bailey, Enlow Fork and Harvey—and related infrastructure. For
its ownership interest, CCR has an effective annual production
capacity of 7.1 million tons of high Btu North Appalachian thermal
coal. More information is available on CCR's website
www.ccrlp.com.
Cautionary Statements
All statements in this press
release (and oral statements made regarding the subjects of this
communication), including those that express a belief, expectation
or intention, may be considered forward-looking statements (as
defined in Section 21E of the Securities Exchange Act of 1934, as
amended, and Section 27A of the Securities Act of 1933, as amended)
that involve risks and uncertainties that could cause actual
results to differ materially from projected results. Without
limiting the generality of the foregoing, forward-looking
statements contained in this communication include statements
relying on a number of assumptions concerning future events and are
subject to a number of uncertainties and factors, many of which are
outside the control of CEIX and CCR, which could cause actual
results to differ materially from such statements. Accordingly,
investors should not place undue reliance on forward-looking
statements as a prediction of actual results. The forward-looking
statements may include, but are not limited to, statements
regarding the expected benefits of the proposed transaction to CEIX
and CCR and their stockholders and unitholders, respectively; the
anticipated completion of the proposed transaction and the timing
thereof; and the expected future growth, dividends and
distributions of the combined company; and plans and objectives of
management for future operations. When we use the words
"believe," "intend," "expect," "may," "should," "anticipate,"
"could," "estimate," "plan," "predict," "project," or their
negatives, or other similar expressions, the statements which
include those words are usually forward-looking statements. When we
describe strategy that involves risks or uncertainties, we are
making forward-looking statements. While CEIX and CCR believe
that the assumptions concerning future events are reasonable, they
caution that there are inherent difficulties in predicting certain
important factors that could impact the future performance or
results of their businesses. Among the factors that could cause
results to differ materially from those indicated by such
forward-looking statements are: the failure to realize the
anticipated costs savings, synergies and other benefits of the
transaction; the possible diversion of management time on
transaction-related issues; the risk that the requisite approvals
to complete the transaction are not obtained; local, regional and
national economic conditions and the impact they may have on CEIX,
CCR and their customers; the impact of outbreaks of communicable
diseases such as the novel highly transmissible and pathogenic
coronavirus (COVID-19) on business activity, the Company's
operations and national and global economic conditions, generally;
conditions in the coal industry, including a sustained decrease in
the level of supply or demand for coal or a sustained decrease in
the price of coal; the financial condition of CEIX's or CCR's
customers; any non-performance by customers of their contractual
obligations; changes in customer, employee or supplier
relationships resulting from the transaction; changes in safety,
health, environmental and other regulations; the results of any
reviews, investigations or other proceedings by government
authorities; and the performance of CEIX and CCR.
The forward-looking statements in this press release speak only
as of the date of this report; we disclaim any obligation to update
these statements. We have based these forward-looking statements on
our current expectations and assumptions about future events. While
our management considers these expectations and assumptions to be
reasonable, they are inherently subject to significant business,
economic, competitive, regulatory and other risks, contingencies
and uncertainties, most of which are difficult to predict and many
of which are beyond our control. These risks, contingencies and
uncertainties relate to, among other matters, the risks and
uncertainties set forth in the "Risk Factors" section of CEIX's and
CCR's respective Annual Reports on Form 10-K for the year ended
December 31, 2019, and Quarterly
Reports on Form 10-Q for the three months ended March 31, 2020 and June
30, 2020, respectively, each filed with the Securities and
Exchange Commission, and any subsequent reports filed with the
Securities and Exchange Commission.
No Offer or Solicitation
This release is for
informational purposes only and shall not constitute an offer to
sell or the solicitation of an offer to buy any securities pursuant
to the transaction or otherwise, nor shall there be any sale of
securities in any jurisdiction in which the offer, solicitation or
sale would be unlawful prior to the registration or qualification
under the securities laws of any such jurisdiction. No offer of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as
amended.
Important Additional Information Regarding the Transaction
Will Be Filed With the SEC
In connection with the proposed
transaction, CEIX will file a registration statement on Form S-4,
including a consent solicitation statement/proxy
statement/prospectus of CEIX and CCR, with the Securities and
Exchange Commission (the "SEC"). INVESTORS AND SECURITY HOLDERS OF
CEIX AND CCR ARE ADVISED TO CAREFULLY READ THE REGISTRATION
STATEMENT AND CONSENT SOLICITATION STATEMENT/PROXY
STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS
THERETO) WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE TRANSACTION, THE PARTIES TO THE
TRANSACTION AND THE RISKS ASSOCIATED WITH THE TRANSACTION. A
consent solicitation statement/proxy statement/prospectus will be
sent to security holders of CEIX and CCR in connection with the
solicitation of the approval of CEIX stockholders and consents of
CCR unitholders, respectively, relating to the proposed
transaction. Investors and security holders may obtain a free copy
of the consent solicitation statement/proxy statement/prospectus
(when available) and other relevant documents filed by CEIX and CCR
with the SEC from the SEC's website at www.sec.gov. Security
holders and other interested parties will also be able to obtain,
without charge, a copy of the consent solicitation statement/proxy
statement/prospectus and other relevant documents (when available)
from CEIX's website at www.consolenergy.com under the "Investors"
tab under the heading "SEC Filings."
Participants in the Solicitation
CEIX, CCR and their
respective directors, executive officers and certain other members
of management may be deemed to be participants in the solicitation
of proxies and consents in respect of the transaction. Information
about these persons is set forth in CEIX's proxy statement relating
to its 2020 Annual Meeting of Stockholders, which was filed with
the SEC on March 27, 2020, and CCR's
Annual Report on Form 10-K for the year ended December 31, 2019, which was filed with the SEC
on February 14, 2020, and subsequent
statements of changes in beneficial ownership on file with the SEC.
Security holders and investors may obtain additional information
regarding the interests of such persons, which may be different
than those of the respective companies' security holders generally,
by reading the consent solicitation statement/proxy
statement/prospectus and other relevant documents regarding the
transaction, which will be filed with the SEC.
Contacts
Investor:
Nathan Tucker, (724) 416-8336
nathantucker@consolenergy.com
Media:
Zach Smith, (724) 416-8291
zacherysmith@consolenergy.com
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SOURCE CONSOL Energy Inc.; CONSOL Coal Resources LP