Parsley Energy Deal: PE Stock Plunges 10% on Jagged Peak Acquisition

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News of a Parsley Energy (NYSE:PE) deal with Jagged Peak (NYSE:JAG) has PE stock falling on Monday.

Parsley Energy Deal: PE Stock Plunges 10% on Jagged Peak Acquisition

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The Parsley Energy deal will have it acquiring Jagged Peak via an all-stock transaction. This will have holders of JAG stock receiving 0.447 shares of PE stock for each share that they own. This values JAG stock at $7.59 per share and has the total value of the deal sitting at $2.27 billion. That includes JAG’s net debt of $625 million.

The offer of $7.59 per share is a 11.20% premium over the closing price for JAG stock on Friday. It is also a 1.50% premium from the stock’s 30-day volume weighted average price.

This Parsley Energy deal will have the company retaining leadership once Jagged Peak joins it. However, it is worth mentioning that two members of JAG’s Board of Directors will join PE”s Board of Directors once the deal is complete. This will have PE increasing the number of positions on its Board from nine to 11.

Parsley Energy and Jagged Peak note that both companies’ Boards of Directors have already given their unanimous approval to the deal. They are also both advising shareholders to vote in favor of the transaction. Quantum Energy Partners, which has a 68% stake in JAG, has already agreed to vote in favor of the deal.

The Parsley Energy deal with Jagged Peak still needs to complete customary closing conditions and get approval from regulators. So long as everything goes well, the company expects the deal to close in the first quarter of 2020.

PE stock was down 10% and JAG stock was down 1% as of Monday afternoon.

As of this writing, William White did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2019/10/parsley-energy-deal-hits-pe-stock/.

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