- SilverBow has refused to enter into good faith negotiations or undertake substantive due diligence to assess the best path forward for unlocking value on behalf of all shareholders – necessitating the need for fresh perspectives in the Boardroom
- Kimmeridge to focus on electing three highly-qualified, independent nominees to SilverBow's Nine-Person Staggered Board at 2024 Annual Meeting
Kimmeridge, an alternative asset manager focused on the energy sector and the largest shareholder of SilverBow Resources holding 12.9% of outstanding shares, today issued the following statement:
On February 21, 2024, Kimmeridge met with SilverBow's Board of Directors and proposed eight different potential strategic transactions the Company could pursue to establish a foundation for long-term value creation in light of continued underperformance. At the Board's invitation, on March 13, 2024, Kimmeridge delivered a financed, premium proposal to combine Kimmeridge Texas Gas ('KTG') and SilverBow with an associated $500 million equity investment (the 'Proposal').
The combination would have created a preeminent pure-play Eagle Ford shale operator with an estimated enterprise value of approximately $3.6 billion. The accretive transaction offered SilverBow shareholders a unique opportunity to participate in the compelling upside of a larger and more resilient company that would have been uniquely positioned to drive growth and lead the next phase of consolidation in the Eagle Ford.
Since then, Kimmeridge has published comprehensive financial and operational data on KTG, pre-populated a data room, and made itself available for good faith discussions towards a potential combination. The Board has done the opposite – rejected the Proposal via its proxy solicitation materials and then claimed the need for more information. SilverBow has not taken the steps that any reasonable counterparty would – they haven't even asked for access to our data room. Likewise, the Company has not suggested any counterproposals or alternative structures that it would prefer.
Kimmeridge most recently asked the Board to provide a clear view of the Company's relative value and the terms under which they would be willing to transact. Based on public statements made by the Company, the Board has such valuation information on hand, yet the Company has not responded. It appears that SilverBow is not willing to seriously engage in any discussions of mergers in which it would be the smaller party. Instead, the Board and management team are focused on maintaining their positions and compensation.
Given SilverBow's lack of engagement, Kimmeridge sees no pathway towards a transaction by the April 26, 2024 deadline that we had put forward more than a month ago. As a result, we are withdrawing the Proposal and will be focused on providing solutions for SilverBow's broken governance. The only way SilverBow will maximize value for all shareholders and reach its long-term potential is by introducing new, independent, and experienced perspectives to the Board.
The nominees we have put forward are committed to conducting a thorough and unbiased evaluation of all potential paths to value creation – and are bound by none of them, including our prior Proposal. Their only fiduciary duty is to advance the best interests of all SilverBow shareholders.
In the weeks ahead, we look forward to engaging with fellow shareholders, who face an important choice at the upcoming 2024 Annual Meeting.
Additional information
Additional information regarding Kimmeridge's definitive proxy statement can be found at www.Kimmeridge.com/sbow/.
Source: Kimmeridge
