Vanguard Natural Resources, LLC and Encore Energy Partners LP Announce Merger Agreement

 

Vanguard Natural Resource, LLC (VNR) and Encore Energy Partners LP (ENP) announced on July 11 that they had executed a definitive agreement to merge.  Under the agreement, Encore, which Vanguard acquired from Denbury Resources on December 31, 2010, will become a wholly owned subsidiary of Vanguard's operating company Vanguard Natural Gas, LLC, through a unit-for-unit exchange.  1.

Under the terms of the agreement, Encore's public unitholders would receive 0.75 Vanguard common units in exchange for each Encore common units held at closing.  This  represents a premium of approximately 4.4% based on the closing prices of Encore common units and Vanguard common units on March 24, 2011, the last trading day before Vanguard announced its intent to acquire all of Encore's publicly held common  units.

The merger is expected to benefit both companies and their unitholders in a number of ways. The combined company will have a streamlined structure, a significantly increased size and scale, and expanded geographic reach and diversification, while the public company expenses incurred by Encore and the administrative services fee it currently pays to Vanguard will be eliminated.

Completion of the merger is subject to approval by a majority of the outstanding Encore common unitsto the approval of the issuance of additional Vanguard common units in connection with the merger by the affirmative vote of a majority of the votes cast by Vanguard unitholders.  If these approvals are obtained and other conditions are met, the merger is expected to be completed in the fourth quarter of 2011.  In the meantime, distributions will continue to be paid by both companies

 Click here to see the press release announcing the merger agreement..