Sep. 23, 2009 (PR Newswire) --
OKLAHOMA CITY, Sept. 23 /PRNewswire-FirstCall/ -- Crusader Energy Group Inc. (Pink Sheets: CKGRQ) today announced that it has entered into an agreement with SandRidge Energy, Inc. (NYSE: SD), pursuant to which SandRidge Energy will purchase all shares of common stock of Crusader that will be issued upon the effectiveness of the reorganization of Crusader and its wholly-owned subsidiaries under Chapter 11 of the United States Bankruptcy Code. As previously announced, Crusader and its wholly-owned subsidiaries filed voluntary petitions for relief under Chapter 11 of the US Bankruptcy Code with the United States Bankruptcy Court for the Northern District of Texas, Dallas Division on March 30, 2009. Under Crusader's proposed plan of reorganization, all of the currently outstanding equity interests in Crusader would be cancelled upon consummation of the SandRidge transaction and Crusader and its wholly-owned subsidiaries would become indirect, wholly-owned subsidiaries of SandRidge.
SandRidge agreed to pay cash and common stock valued in the aggregate at $230 million, no more than $85 million of which will be cash, subject to certain adjustments. SandRidge will also issue warrants to purchase an additional two million shares of SandRidge common stock, with an agreed value of $11 million among Crusader and certain of its creditors. The warrants will be exercisable at a price of $15.00 per share for five years after the closing of the transaction. Recipients of the SandRidge common stock and warrants will not be permitted to dispose of such common stock or warrants for 180 days after the closing of the transaction. Based on the consideration to be paid by SandRidge, the holders of Crusader's outstanding equity interests would not receive any distribution under the proposed plan of reorganization on account of their equity interests.
The closing of the transaction is subject to customary conditions, as well as confirmation of Crusader's plan of reorganization by the Bankruptcy Court, and consideration of alternative transactions that may be submitted prior to a deadline to be approved by the Bankruptcy Court. Until the entry of the Bankruptcy Court order approving the bid procedures pursuant to which proposals for an alternative transaction involving Crusader and its subsidiaries may be submitted, Crusader and its representatives are restricted under the SandRidge agreement from soliciting alternative transactions or engaging in discussions or negotiations with potential interested parties.
Crusader and SandRidge also have entered into an agreement with Crusader's unsecured creditors committee and Crusader's principal secured creditors to support the proposed transaction as co-proponents of Crusader's plan of reorganization. The closing is expected to occur during the fourth quarter of 2009.
