Rice EnergyNYSE(Reuters) – U.S. oil and gas company EQT Corp said on Monday it would buy Rice Energy in a cash-and-stock deal worth $6.7 billion to expand its natural gas business.
Rice Energy shareholders will receive $5.30 per share in cash and 0.37 EQT shares for each share they hold, EQT said.
The offer translates to $27.05 per Rice Energy share, representing a premium of 37.4 percent to the stock’s Friday closing price, according to Reuters calculations.
Rice Energy’s shares surged nearly 26 percent to $24.90, while EQT’s stock was down 7.3 percent in premarket trading on Monday.
EQT said the deal would give it access to Rice Energy’s midstream assets, including a 92 percent interest in Rice Midstream GP Holdings. EQT will take on about $1.5 billion in debt, through the deal.
Citigroup was EQT’s financial adviser, while Wachtell, Lipton, Rosen & Katz were its legal advisers. Barclays Capital Inc was Rice Energy’s financial adviser and Vinson & Elkins LLP its legal adviser. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Sai Sachin Ravikumar and Saumyadeb Chakrabarty)