EQT to Acquire Rice Energy in a $6.7 Billion Deal


Jun. 20 2017, Updated 2:13 p.m. ET

EQT to acquire Rice Energy

On Monday, June 19, 2017, EQT (EQT) announced that it intends to acquire Rice Energy (RICE). In its news release, the company had stated that it would buy all of Rice Energy’s total outstanding shares for approximately $6.7 billion.

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Transaction highlights

EQT’s press release noted that most of the acquired acreage is contiguous with its existing acreage position. EQT also noted that the deal would complement its “infrastructure footprint” of EQT Midstream Partners, LP (EQM), EQT’s limited partnership. EQT expects growth opportunities through drop-downs and additional projects via its access to Rice Energy’s midstream assets. The deal also includes a 92% interest in Rice Midstream GP Holdings.

Financial highlights

EQT announced that shareholders in Rice Energy would receive 0.37 EQT shares and also $5.30 in cash for every share of RICE common stock. A presentation released on the same day stated an implied value of $27.04 per share of RICE as of June 16, 2017. RICE’s stock price on June 16 was $19.69, so the offer value represents a premium of 37% to RICE’s June 16 closing.

Plus, EQT announced that it would assume or refinance ~$1.5 billion in net debt and preferred equity on RICE’s balance sheet. The company expects the transaction to close in 4Q17.

We’ll look at operational and financial implications in more detail in a later part of this series. But first, let’s see how EQT’s volumes should change.


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