Houston-based Talos Energy is paving the way for the completion of acquisition of a package of assets in the Gulf of Mexico from affiliates of ILX Holdings by completing another regulatory step.
Talos on Friday announced the filing of a preliminary Schedule 14C information statement with the Securities and Exchange Commission (SEC), an important regulatory step towards closing of the company’s previously announced acquisition of affiliates of ILX Holdings, among other entities.
The company has filed a preliminary information statement with the SEC to inform the company’s stockholders about the acquisition.
At the time the parties entered into the transaction on December 10, 2019, holders of approximately 62.9% of the company’s outstanding shares acted by written consent to approve the transaction and the proposed issuance of 11.0 million new shares as consideration in the transaction, so the company is not seeking additional stockholder approval.
The filing is an important milestone that helps pave the way for the closing of the acquisition, Talos explained. The company expects to close the transaction approximately 20 days after a definitive information statement is mailed to stockholders, the timing of which will depend on any review of the preliminary information statement by the SEC. If the SEC does not review the filing, Talos expects to close the transaction on or before March 16, 2020.
Upon closing of the acquisition, the company will issue 11.0 million shares of Talos’s common stock to the sellers and pay the cash consideration. The cash consideration of $385 million will be reduced at closing by the approximately $31.8 million deposit paid into escrow upon the signing of the definitive agreements. The cash consideration will be further reduced at closing by the cash flow generated by the acquired assets between the July 1, 2019 effective date of the acquisition and the closing date.
As previously announced, Talos expects to fund the remaining cash component of the acquisition with borrowings under the company’s upsized reserves based lending credit facility and cash on hand.
Talos President and Chief Executive Officer, Timothy S. Duncan, commented: “The filing of the information statement is an important step towards closing the acquisition. Talos continues to be very excited with the addition of the acquired assets to our portfolio and to strengthen the partnerships with great operators in our basin. We are pleased to see numerous key projects included in the acquired assets advancing in line with or faster than our expectations.
“These diverse, high cash flowing assets continue to be a great fit for the Talos portfolio moving forward. We look forward to achieving a successful closing in the first quarter of this year and integrating these assets into our business.”
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