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Atlas Shareholders Approve Company’s Sale to Chevron

Feb. 16 (Bloomberg) -- Atlas Energy Inc. shareholders approved Chevron Corp.’s $3.58 billion takeover bid, clearing the way for the oil company’s first U.S. shale-gas purchase.

Almost 100 percent of shareholder votes were cast in favor of the takeover, which is expected to close “promptly,” according to a statement today from Atlas. The company, based in Moon Township, Pennsylvania, is one of the largest leaseholders in the Marcellus Shale gas field, controlling 622,000 acres.

The transaction “will most likely close tomorrow night,” Scott Hanold, an Austin, Texas-based analyst with RBC Capital Markets, said in an e-mail.

Major U.S. oil companies have been acquiring holdings in the Marcellus and other North America shale formations to increase their access to onshore oil and gas production. Exxon Mobil Corp. last year bought XTO Energy Inc., which owned acreage in the Barnett Shale in Texas and Louisiana.

Shale-rock formations require injection of water, sand and chemicals to release gas.

Chevron’s cash-and-stock bid valued the company at $43.34 a share when it was announced Nov. 9, a 37 percent premium to the previous day’s closing price. Based on current prices, the offer is worth $45.48 a share.

Reliance Industries Ltd., which has a joint venture to drill in the Marcellus Shale with Atlas, said in a Jan. 10 letter to Atlas’s board that it should’ve been given a chance to make an offer. A spokesperson in the Houston office of Mumbai-based Reliance didn’t immediately respond to a voice mail seeking comment.

Pipeline Subsidiary

As part of the agreement with Chevron, Atlas will sell certain gas reserves and assets to its pipeline subsidiary, Atlas Pipelines Holdings LP, and acquire the subsidiary’s interest in another pipeline partnership, Laurel Mountain Midstream LLC. Atlas Energy didn’t immediately return a phone call seeking comment.

Chevron, based in San Ramon, California, agreed on Feb. 7 to pay an additional 10 cents a share to settle a shareholder lawsuit that alleged the bid was too low.

Atlas rose 73 cents to $45.84 at 4:54 p.m. on the Nasdaq Stock Market. Chevron rose 32 cents to $96.66 in composite trading on the New York Stock Exchange.

To contact the reporter on this story: Mike Lee in Dallas at Mlee326@blooomberg.net.

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net.

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