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Deal to Take Continental Private

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Continental Resources has said it has agreed to be taken private by billionaire-founder Harold Hamm in a deal that would value the US shale producer at about $27 billion.

Fracking pioneer Hamm has offered $74.28 per share for the stake not owned directly or indirectly by him and the Hamm family.

The latest offer is 6.1 percent higher than the original proposal of $70 made in June. Smead Capital Management, the largest shareholder after the Hamm family with around two percent, had said in June the original offer “undervalues” the company.

The company’s shares jumped more than eight percent to $73.88 in premarket trading.

Hamm founded Continental – the largest oil and gas producer in the Bakken shale – as Shelly Dean Oil Company in 1967 and ran it as a private firm until 2007.

In a letter to employees in June detailing his offer, Hamm lamented that the public markets have not supported the oil and gas industry and limited its growth, especially since the pandemic.

US crude and natural gas prices have this year hit their highest levels since 2008 after being battered during the pandemic-led lockdowns, and the shale industry has also rebounded sharply.

Still, analysts have said that the Continental buyout is not expected to lead to similar deals because Hamm’s large stake is not found among other publicly traded producers.

This all-cash offer represents a premium of 8.9 percent to Continental’s closing price on Friday 14, and 15 percent to the close before Hamm’s initial offer was announced.

It includes 28 cents per share in lieu of the anticipated dividend for the third quarter, the company said, adding that it will not pay dividends between the signing and closing of the deal, which is expected prior to December 31.

Hamm and his family own 83 percent of Continental’s common stock and the deal does not require a vote by shareholders.

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