SandRidge Energy expands bidding process
The new SandRidge Energy Inc. directors have expanded their effort to seek and evaluate offers to buy the company or partner in the development of its assets, SandRidge said Friday.
The Oklahoma Citybased oil and natural gas producer has entered into confidentiality agreements with 26 companies. Ten have made offers to buy the entire company and 16 are focused only on SandRidge’s assets in Colorado, the directors said.
Three additional companies are in the process of making bids. Two of those are for the Colorado assets, and the third is a bid for the entire company.
“The company is emphasizing openness to asset sale proposals, as well as proposals which would result in the sale of the entire company,” the directors said in Friday’s statement.
Many of the bidding companies are considering reverse merger deals, SandRidge said. A reverse merger is when a private company buys a publicly traded company. The new company typically adopts the publicly traded company’s stock symbol and information and often takes the public company’s name, at least temporarily. The corporate office typically remains at the buyer’s location.
SandRidge began the strategic review process in March under the previous directors after they rejected a bid from Tulsa-based Midstates Petroleum Co. Inc. to buy SandRidge.
Activist investor Carl Icahn has been highly critical of that review process, saying the SandRidge directors were too restrictive about how much they shared with potential bidders. Icahn last week gained control of the company because of the shareholder vote at the company’s annual meeting.
Five of SandRidge’s eight directors now are Icahn nominees, including the chairman, who is an Icahn employee.
Under the new board, the strategic review process is overseen by all directors rather than a board committee, the company said Friday. The directors also said they have made it easier for companies to bid.
“Certain restrictions imposed by former board of directors have been eased to permit additional parties, including Midstates Petroleum, to submit bids if they choose to do so,” the directors said in Friday’s statement.
The strategic review process also includes SandRidge’s internal strategies, the company said Friday.
“This review will include a comprehensive assessment of the previous capital expenditure program and the company’s drilling program in an effort to maximize the value of the company’s assets,” the board stated. “The company will also be reviewing its expense footprint and will be performing a complete and comprehensive re-evaluation of its hedging program.”