Tomahawk, WI 07/15/2014 (Basicsmedia) – An Interesting Deal
Kodiak Oil & Gas Corporation (NYSE:KOG) on this Sunday afternoon announced that they are ready to sell their company to Whiting Petroleum (NYSE:WLL) for $6 billion which might include their assuming debts. This deal will give the investors of Kodiak Oil & Gas Company an ownership of about 29% percent in the newly joint company. This deal has been considered very interesting seeing that at the time of selling, the stock price was less than the price before a week.
Investigation Of The Deal
Morgan & Morgan, a law firm, have announced that it will be investigating Kodiak’s deal. Their main concern is to know whether the board of Directors has purposely acted in best possible way to harm their shareholders to achieve maximum profit from the deal. Also they are afraid that company has violated many acceptable laws, conducted unfair sales and have come to the deal of selling their company to Whiting Petroleum Corp. at the cost of Kodiak’s shareholders.
Faruqi and Faruqi, LLP, another law firm has also been found investigating the firm for the same known reasons. Even this firm has been found out for being interested in same concern that whether Kodiak’s Board of Directors have failed in conducting a right sale process.
Reasons For The Investigation
The Kodiak’s deal is quite a surprising deal which was set to be sealed at approximately $6 billion. The deal reveals that Kodiak’s shareholders will receive only 0.177 of Whiting Petroleum share on each of their owned stock, which is equivalent to about $13.90 per share. While reports say that it should be set at around a price of $19.00 for the company’s shareholders.
Also the acquisition of the company seems to be quite undervalued. In fact Kodiak Oil & Gas Corporation (NYSE:KOG) was sold about 11.6 times lower than the EBITDA, other oil and gas deals were made in last year which were over $1 billion.