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Chesapeake Energy set to buy Wildhorse in $4B deal as third quarter beats analysts' expectations

Chesapeake shares slumped nearly 6% in before the bell New York deals to $3.50.

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Chesapeake shares sank in pre-market

Shares in Wildhorse Resources Development Corp (NYSE:WRD) surged over 11% in pre-market to $20.50 after it emerged oil titan Chesapeake Energy Corp (NYSE:CHK) had agreed to buy the firm in cash and shares in a deal worth around $4 billion.

Chesapeake shares slumped nearly 6% in before the bell New York deals to $3.50.

"This transaction accelerates Chesapeake's strategic plan and expands the value-creation opportunities for our shareholders by adding a premier asset at an attractive valuation, significantly boosting oil production, EBITDA margins and cash flow growth, while improving our leverage metrics," said Cheasepeake's chief executive Doug Lawler on Tuesday.

Each WildHorse shareholder will get either 5.989 shares of Chesapeake common stock, or a combination of 5.336 shares of Chesapeake stock and US$3 in cash, for each share they hold.

The deal is expected to close in the first half of 2019 and Chesapeake will finance the cash part of the deal of $275 million to $400 million via a revolving credit facility.

Also today, Chesapeake posted profit and revenue in its third quarter, which surpassed Wall Street estimates.
The company posted adjusted per-share earnings for the three months of $0.19, which was ahead of consensus of $0.15.
Revenue came in at $2.418 billion from $1.943 billion, which was also a beat.

Chesapeake Energy Corp set to acquire Wildhorse Resources in $4B deal as third quarter beats analyst expectations

Quick facts: Chesapeake Energy Corporation

Price: 0.595 USD

NYSE:CHK
Market: NYSE
Market Cap: $1.15 billion
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