George,
Thanks for the clarification. Below is an article in yesterdays newpaper.
NEW MESA MERGER TERMS TO BOOST RAINWATER STAKE BY $74 MILLION
Fort Worth financier Richard Rainwater will get more Mesa Inc. shares currently worth an extra $74 million as part of Mesa's $1.2 billion offer to acquire Parker & Parsley Petroleum Co.
As part of the merger agreement, Irving-based Mesa increased the conversion ratio for its preferred shares, meaning that Mr. Rainwater and other preferred holders get more shares of the new company than they would have under the orignal conversion terms. Mr. Rainwater is Mesa's largest shareholder with about a 33 percent stake.
The agreement, announced April 7, allows holders to convert one share of Mesa's Class A or Class B preferred stock into 1.25 shares of Mesa common stock.
When the shares were issued in August, they were convertible into one Mesa common share.
Mesa spokesman Garrett Smith said the natural gas producer raised the conversion rate to compensate holders for the preferred shares' 8 percent annual dividend.
"We are inducing them to convert it into common by giving them more common," he said.
The preferred shares are convertible at any time and have a mandatory redemption in 2006.
Under the proposed merger, Mesa holders would exchange seven common shares for one share of the combined company, to be known as Pioneer natural Resources Co.
Mr. Rianwater holds about 62.4 million shares of Mesa's Class B preferred stcok. With the new conversion rate, he'll get 78 million Mesa shares, worth about $370.5 million at the current share price of $4.75. Under the old one-for-one conversion, his stake would be worth $296.4 million. |
