Not all is right with the world for some of the shareholders of Southwestern Energy as the company prepares to merge with Oklahoma City’s Chesapakeae Energy in a more than $7 billion deal.
The Houston-based company revealed in a filing with the Securities and Exchange Commission that it received “seven demand letters from purported stockholders of Southwestern and one demand for books and records.”
“Three complaints have been filed against Southwestern in New York Supreme Court, asserting claims for negligence, negligent misrepresentation, and breaches of fiduciary duties stemming from allegedly material omissions in the joint proxy statement/prospectus (the “Complaints”),” stated the company in the SEC filing.
According to the fiiling, the demand letters contended that material information was omitted from the firm’s joint proxy statement/prospectus.
“Absent new or different allegations that are material or a disclosure obligation under the U.S. federal securities laws, Southwestern will not necessarily disclose such additional demands or complaints,” continued the firm.
Southwestern defended the proxy statement/prospectus saying it fully complies with the law and exchange rules and ” that no further disclosure beyond that already contained in the joint proxy statement/prospectus is required under applicable law or exchange rules, and that the allegations asserted in the Demand Letters are entirely without merit.”
The Houston company added that in order to “moot these disclosure claims” and to avoid any possible delays in the closing of the merger, it voluntarily supplemented the proxy statement/prospecturs with more disclosures.
Chesapeake’s proposed merger had been anticipated to be closed earlier but the Federal Trade Commission asked for more information from both firms. The closing is now expected late in 2024.
