Not a lot of action on this board.
Have been watching MHR for a couple of weeks.....
Any thoughts on this (read this news on Yahoo)
Monday December 14, 11:50 am Eastern Time
ONEOK to buy $50 mln Magnum Hunter preferred stock
IRVING, Texas, Dec 14 (Reuters) - Oil exploration and development company Magnum Hunter Resources Inc. (AMEX:MHR - news) said Monday it plans to sell $50 million of the company's convertible preferred stock to ONEOK Inc. (NYSE:OKE - news), one of the largest natural gas distributors in the United States.
The letter of intent to sell the stock also empowers ONEOK to market Magnum's natural gas in Oklahoma. It also allows ONEOK to participate in future acquisitions in the state, including the recent acquisition of certain assets of Spirit Energy 76, a unit of California-based Union Oil Co, which is itself part of Unocal Corp (NYSE:UCL - news).
Magnum purchased Spirit Energy 76 for $36.6 million, and expects that deal to close by the end of the year. As a result, ONEOK will purchase certain Oklahoma-based properties included in that acquisition.
ONEOK will also have the right to nominate two new members to Magnum's existing board of directors.
The deal is subject to certain agreements between the two companies, as well as to consent from a majority of Magnum's existing 10 percent senior note holders. The company said it expects the deal to close by Jan. 29, 1999.
The company said the preferred stock will have a liquidation value of $50 million and will be convertible into Magnum's common stock at $5.25 per share. Cumulative cash dividends on the preferred stock will be paid at a rate of 8 percent.
Magnum said it will use the proceeds from the sale to repay senior bank indebtedness, as well as to fund general corporate functions and to finance acquisitions.
In November, the company reported a third quarter loss of $2,272,000, or $0.12 per share, compared to a loss of $509,000, or $0.05 per share in 1997. The company's revenues rose slightly to $11,634,000 from $10,765,000 in the same period of the previous year.
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and News: Magnum Hunter Resources Inc (AMEX:MHR - news)
Oneok Inc (NYSE:OKE - news)
Unocal Corp (NYSE:UCL - news)
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