Chevron Corp., the second-largest U.S. oil company, will pay holders of Atlas Energy Inc. an additional 10 cents a share to settle litigation when its $3.59 billion purchase of the natural-gas producer is completed.
The settlement follows Atlas shareholder lawsuits that alleged company directors breached fiduciary duties by agreeing to an inadequate merger price and using an unfair process, according to a filing with the U.S. Securities and Exchange Commission today. The defendants denied any violations of their duties.
Reliance Industries Ltd., which has a joint venture with Atlas, has said it should’ve been given a chance to top Chevron’s Nov. 9 offer. The company, based in Mumbai, sent a Jan. 10 letter to the board calling itself the “most natural and obvious” partner to buy Atlas.
The additional 10 cents a share “doesn’t really move the needle too much,” said Fadel Gheit, an analyst at Oppenheimer & Co. in New York who has a “market perform” on Chevron and owns shares of the company. “There will be no white knight. It’s a done deal.”
Chevron’s cash-and-stock bid valued the company at $43.34 a share, a 37 percent premium to the closing price a day before it was announced. The additional 10 cents would add about $7.8 million to the overall deal value.
Certain shareholders are excluded from the 10 cents, including Vice Chairman Jonathan Cohen and Chief Executive Officer Edward Cohen.
Atlas rose 4 cents to $45.86 at 4 p.m. on the Nasdaq Stock Market. Chevron rose 55 cents to $97.66 in New York Stock Exchange composite trading.
Exxon Mobil Corp. is the largest U.S. oil company.