8-KOther Events

DEVON ENERGY CORP/DE 8-K Report (Jul 12, 2000)

Filed July 12, 2000For Securities:DVN

Summary

Devon Energy Corporation filed an 8-K on July 12, 2000, detailing an amendment to its Agreement and Plan of Merger with Santa Fe Snyder Corporation. This amendment, dated July 11, 2000, specifically modifies Section 7.1(a)(ii) of the original merger agreement. Investors should note this as a procedural update in a significant acquisition process. Additionally, the report discloses the successful issuance of $760 million in Zero Coupon Convertible Senior Debentures due 2020 on June 27, 2000. These debentures were issued at a discount, raising approximately $346 million in gross proceeds and carrying a yield-to-maturity of 3.875%. The debentures offer conversion rights into Devon Energy common stock and include put and call options for investors and the company, respectively, providing a degree of flexibility and potential upside.

Key Highlights

  • 1Amendment filed to the Agreement and Plan of Merger with Santa Fe Snyder Corporation, specifically altering Section 7.1(a)(ii).
  • 2Successful issuance of $760,000,000 in Zero Coupon Convertible Senior Debentures due 2020.
  • 3Gross proceeds of approximately $346 million raised from the debenture issuance.
  • 4Debentures priced at $464.13 per $1,000.00 face value, reflecting a 3.875% yield-to-maturity.
  • 5Initial conversion rate set at 5.7593 shares per $1,000.00 face value.
  • 6Debentures feature put options for bondholders on key anniversaries and call options for the company after five years.
  • 7Registration Rights Agreement in place to register resale of debentures and underlying common stock.

Frequently Asked Questions

The amendment, dated July 11, 2000, modifies a specific section (7.1(a)(ii)) of the original merger agreement. While the exact impact of this modification isn't detailed in the 8-K summary, it suggests a procedural update or adjustment to the terms of the proposed acquisition.

Devon Energy raised approximately $346 million in gross proceeds from the issuance of $760 million in principal amount of Zero Coupon Convertible Senior Debentures due 2020. These debentures were issued at a discount, yielding 3.875% to maturity and are convertible into Devon Energy common stock.

The debentures offer investors a put option, allowing them to sell the debentures back to the company on the fifth, tenth, and fifteenth anniversaries of the issue date at the issue price plus accrued discount. The company has the option to call the debentures any time after five years, also at the issue price plus accrued discount. The company can choose to repay debentures in cash, stock, or a combination thereof.

The Registration Rights Agreement ensures that Devon Energy will register for resale the Zero Coupon Convertible Senior Debentures and the common stock that may be issued upon their conversion or repurchase. This makes it easier for the initial purchasers and subsequent holders to sell these securities in the public market.