The Latest Update on the EQT–Rice Energy Deal

EQT’s (EQT) proposed acquisition of Rice Energy (RICE) is expected to add around 1.3 Bcfe (billion cubic feet equivalent) per day to EQT’s natural gas volumes. According to EQT, the combined EQT-RICE will result in the largest natural gas producer in the United States, ahead of ExxonMobil (XOM), Chesapeake Energy (CHK), and Southwestern Energy (SWN).

In its July presentation, EQT (EQT) provided an update on where it stood on the Rice Energy (RICE) acquisition. The company noted that it had syndicated a $1.4 billion loan and received the necessary government clearance to complete the transaction.

The steps that remain to be taken are the filing of the S-4 form with the SEC (U.S. Securities and Exchange Commission) for review. The filing is a necessary process for publicly traded companies to register all material information relating to mergers or acquisitions.

Following this, the final step will be to obtain shareholder votes and close the transaction.

Jana Partners has criticized EQT that it would be better off separating its upstream and midstream businesses (see Part 1). EQT responded in its July presentation that “there is a sum-of-the-parts discount and EQT management has committed to evaluating options and devising a plan to address this discount by the end of 2018.” The company also noted that the Rice transaction would not impair EQT’s ability to address the sum-of-the-parts discount.