Pinnacle Gas Resources higher on buyout news
Shares of Pinnacle Gas Resources, Inc. (Nasdaq: PINN) received a jolt on news before the opening that the independent energy company is being purchased by Quest Resource Corp. (Nasdaq: QRCP) for about $207 million.
Pinnacle stockholders will receive 0.6584 shares of Quest common stock for each share of Pinnacle common stock they own. Like Quest, Oklahoma City-based Pinnacle is a small-cap natural gas developer and producer. The stock-for-stock merger has been unanimously approved by both boards and will result in a combined company with a stock market capitalization of approximately $450 million.
“The combination of Quest and Pinnacle is an excellent fit and builds substantial scale for our stockholders,” said Pinnacle president and CEO Peter Schoonmaker in a statement. “The merger combines dominant acreage and operating positions in two prolific low risk resource plays with over one million acres under lease that will allow considerable growth in production, reserves and pipeline development.”
After the merger, which is expected to close in the first half of 2008 pending shareholder approval, Pinnacle will operate as a unit of Quest. Quest’s current stockholders will own 55% and Pinnacle’s current stockholders will own the remaining 45%. Jerry Cash, Quest’s current chairman, president, and CEO, will retain his position.
At 12:51 p.m. ET, shares of Pinnacle Gas Resources (PINN) had added $1.22, or 25%, to $6.08. The previous 52-week high of $8.75 was reached on May 15, while the 52-week low of $3.55 was touched on Aug. 16.
