Talos Energy LLC will merge with Stone Energy Corp. Both U.S. companies are focused on the Gulf of Mexico. This merger will signal the creation of a new company valued in the neighborhood of $2.5 billion. Talos Energy Chief Executive Officer Timothy Duncan expressed how pleased he his is over this big merger. Timothy states that “The idea of a reverse merger works very well for us, as we get a lot of talented people…” The new company will be named Talos Energy Inc. and Timothy Duncan will remain as CEO in the new company. Shares held from Stone will be exchanged for stocks in the new Talos Energy Inc.
This will be done on a one-for-one basis and the existing stockholders from Talos will get 34.2 million shares in order to give them 63 percent of the new company. The merger has been provisionally backed by Franklin Advisers and Mackay Shields, the two firms that own 53 percent of Stone. The deal this provides for Talos gives the firm a route to an all-important stock exchange listing. Previous attempts to have a public offering were thrown off course by turbulence in the market. Reuters has learned that in October of 2014, Talos had been backed by Apollo Global Management and Riverstone Holdings, both private equity firms.
The new company will be able to average 47,000 barrels of oil equivalent per day. There is a huge opportunity for growth with the creation of this new company. The new company will be openly looking into available options at making more acquisitions. The Gulf of Mexico and other regions would be target areas according to Timothy Duncan. Talos’s financial advisors for this huge merger were Citigroup and UBS. Legal counsel was provided by Wharton & Garrison LLP, Rifkind, Paul Weiss and Vinson & Elkins LLP.