Equities

Crescent Eyes $2.1B SilverBow Buy Amid Proxy Battle

Crescent Energy in talks for a $2.1 billion acquisition of SilverBow amid a proxy battle and strategic expansions.

By Alex P. Chase

5/16, 06:14 EDT
Blackstone Inc.
ConocoPhillips
EOG Resources, Inc.
KKR & Co. Inc.
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Key Takeaway

  • Crescent Energy Inc. is in advanced talks to acquire SilverBow Resources Inc. for $2.1 billion, amidst a proxy battle involving SilverBow's largest shareholder.
  • The deal would make Crescent one of the largest operators in the Eagle Ford basin, enhancing its position in the oil and gas sector.
  • Blackstone’s credit unit plans to sell about $450 million of loans, some distressed, aiming to provide liquidity from an older fund's portfolio valued at 60 cents on the dollar.

Crescent Eyes SilverBow Acquisition

Crescent Energy Inc. is reportedly in advanced discussions to purchase SilverBow Resources Inc., an oil and gas producer currently embroiled in a proxy battle with its largest shareholder. The potential deal, which could be valued at approximately $2.1 billion, involves Crescent, a company managed and backed by KKR & Co. While the specifics of the agreement are yet to be finalized, an announcement could be imminent, possibly as early as Thursday. This information comes from sources close to the matter who chose to remain anonymous due to the confidentiality of the discussions. Representatives for Crescent, KKR, and SilverBow have declined to comment on the potential acquisition.

SilverBow's market performance has seen an 11% increase this year, despite a slight decrease of 0.6% to $32.35 in New York trading on Wednesday. This positions the Houston-based company with a market value of around $826 million and an enterprise value, including debt, of approximately $1.9 billion. Crescent's shares also experienced a downturn, falling 0.8% to $12.25, reflecting a market value of about $2.2 billion.

Proxy Battle and Market Dynamics

The acquisition talks come at a critical time for SilverBow, as it attempts to counter a board challenge from Kimmeridge Energy Management Co., which holds about 13% of SilverBow's outstanding shares. The conflict with Kimmeridge has been ongoing since the asset manager began accumulating a stake in 2022. Despite Kimmeridge dropping its latest takeover offer, it is seeking three seats on SilverBow’s board. The shareholder vote on board candidates from both SilverBow and Kimmeridge was scheduled for Tuesday, with proxy advisers Institutional Shareholder Services and Glass Lewis recommending support for SilverBow’s nominees.

Both Crescent and SilverBow operate in the Eagle Ford basin, a region rich in oil and gas located in southeastern Texas. Crescent, which is 15% owned by KKR, also maintains drilling operations in the Rocky Mountain region. Over the past three years, Crescent has grown through six transactions, including five asset deals, with a combined value of over $2 billion. The merger with SilverBow would position Crescent as one of the largest operators in the Eagle Ford basin, alongside industry giants like EOG Resources Inc. and ConocoPhillips.

Blackstone's Credit Portfolio Moves

In a separate development, Blackstone Inc.’s credit unit is reportedly seeking to offload approximately $450 million of loans, some of which are distressed. This move aims to provide liquidity to investors in an older fund, which acquired the loan portfolio for $2.4 billion in 2017 from NewStar Financial. With the fund past its reinvestment window, Blackstone is in the process of selling the remaining loans, working with Evercore Inc. to manage the sale. The portfolio includes debt from various companies, and a bid has been selected that values the portfolio at around 60 cents on the dollar, though the deal has not yet been finalized. Representatives for Blackstone and Evercore have declined to comment.

Texas Business Titans Secure Prime Houston Tract

In another noteworthy transaction, a collaboration between John Goff, chairman of Fort Worth-based Crescent Real Estate, and prominent Houston businessmen Doug Schnitzer and Leslie Doggett, has led to the acquisition of a coveted 6.3-acre tract in Uptown Houston. The venture plans a mixed-use development on the site, previously owned by Wulfe & Company. While the purchase price remains undisclosed, the site's strategic location in the Uptown District suggests significant development potential, with plans for office, hospitality, residential, and retail assets. This acquisition underscores the ongoing interest and investment in prime real estate within major Texas urban centers.