Magellan Petroleum Corporation (NASDAQ:MPET) has announced its engagement in a merger deal with TELLURIAN INC (OTCMKTS:TLRN) along with its plans to venture into the liquid natural gas (LNG) business.
Magellan president and CEO J. Thomas Wilson stated that the merger highlights his company’s strategic plans and it concludes the review process for strategic alternatives. Wilson also noted that the new deal will provide a unique opportunity for the company’s stakeholders to be part of the engagement at an early stage. The CEO stressed the level of success expected from the merger by comparing it to the success that Cheniere Energy, Inc. (NYSEMKT:LNG) has enjoyed during Charif Souki’s leadership.
Tellurian co-founder Martin Houston also released a statement saying his company has experience with LNG particularly in Louisiana with the 26-millon tonnes liquefaction project. Tellurian also has a strong relationship with General Electric Company (NYSE:GE), Chart Industries, Inc. (NASDAQ:GTLS) and Bechtel. Its portfolio of past engagements makes it the ideal partner for Magellan. The merger deal will also allow Tellurian to gain more funding for further developments in the Driftwood LNG which should be in full gear in 2022.
The terms of the merger deal between the two companies have been unanimously approved by the board of governors from both firms. The boards have also urged the stakeholders to take the same course of action the deal is currently pending shareholder approval for it to be completed. However, the deal is expected to be complete before the end of the year.
Once the deal is complete, Tellurian will convert each of its shares so that each shareholder will receive 1.30 Magellan shares for every tellurian share. Magellan has also revealed that it will issue about 122 million shares of the common stock variety to Tellurian stakeholders. The 122 million shares are roughly 95% of the outstanding pro forma common stock from Magellan. Gray Reed & McGraw, P.C was Tellurian’s legal advisor for the deal while Stubbs LLP was Magellan’s legal advisor. Petrie Partners Securities, LLC was the financial advisor for Magellan.