ROAN RESOURCES, INC. Item 8.01. Other Events.
As previously disclosed, on
Litigation Related to the Merger
Following the filing of the Proxy Statement with the
The Stockholder Actions allege that, among other things, the Proxy Statement fails to disclose certain allegedly material information in violation of Section 14(a) and Section 20(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as well as Rule 14a-9 under the Exchange Act. The Burfeind Action further alleges that the directors of the Company failed to fulfill their fiduciary duties in connection with the Merger by purportedly initiating a process to sell the Company in a transaction that undervalues the Company. The complaints seek injunctive relief enjoining the Merger, damages and costs, among other remedies. Copies of the complaint in each of the Burfeind Action and the Franchi Action are attached hereto as Exhibit 99.1 and 99.2, respectively, and incorporated by reference herein.
It is possible that additional, similar complaints may be filed or the complaints described above are amended. If this occurs, the Company does not intend to announce the filing of each additional, similar complaint or any amended complaint unless it contains materially new or different allegations. Although the Company cannot predict the outcome of or estimate the possible loss or range of loss from these matters, the Company and the Company's defendant directors believe that these complaints are without merit and intend to vigorously defend them.
The Company believes that no supplemental disclosures are required under applicable laws; however, in order to avoid the risk of the Stockholder Actions delaying the Merger and minimize the expense of defending the Stockholder Actions, and without admitting any liability or wrongdoing, the Company is voluntarily making certain disclosures below that supplement those contained in the Proxy Statement. These disclosures, and disclosures on certain other matters, are provided in this Current Report on Form 8-K. Nothing in this Current Report on Form 8-K shall be deemed an admission of the legal necessity or materiality under applicable laws of any of the disclosures set forth herein. To the contrary, the Company specifically denies all allegations in the foregoing complaints, including that any additional disclosure was or is required.
SUPPLEMENT TO PROXY STATEMENT
The Company is supplementing the Proxy Statement with certain additional information set forth below. These disclosures should be read in connection with the Proxy Statement, which should be read in its entirety. All page references are to pages in the Proxy Statement, and terms used below, unless otherwise defined, have the meanings set forth in the Proxy Statement. New text is underlined and bolded, and deleted text is stricken through.
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The disclosure on page 37 of the Proxy Statement is hereby supplemented by inserting the following disclosure as a new paragraph between the eighth and ninth paragraphs on the page:
Given the broad scope of the Company's consideration of strategic alternatives
and the significant number of potential counterparties that the Company expected
to engage with, the Board determined to engage each of the
The disclosure on page 38 of the Proxy Statement is hereby supplemented by revising the second complete paragraph on the page in its entirety as follows:
Over the course of the next two months, in accordance with the Board's
directives, representatives of the
The disclosure on page 58 of the Proxy Statement is hereby supplemented by revising the third sentence of the last complete paragraph on the page as follows:
An implied aggregate reference range was derived based on the Company forecasts
(reflecting both Wall Street Consensus Pricing and NYMEX Strip Pricing), public
filings and other publicly available information, as applicable, from (i) the
after-tax net present values (as of
The disclosure on page 66 of the Proxy Statement is hereby supplemented by revising the third and fourth sentences of the second paragraph on the page as follows:
The implied terminal value of the Company was derived by applying to the
Company's fiscal year 2023 estimated adjusted EBITDAX a selected range of
adjusted EBITDAX multiples of 2.5x to 3.5x selected based on Jefferies'
professional judgment and taking into account, among other things, implied
calendar year 2019 estimated adjusted EBITDAX multiples of the Company and the
selected companies. The present values (as of
The disclosure on page 66 of the Proxy Statement is hereby supplemented by revising the second sentence of the third paragraph on the page as follows:
An implied aggregate reference range for the Company's proved developed
producing reserves and currently undeveloped resources was derived by
calculating the net present values (as of
The disclosure on page 69 of the Proxy Statement is hereby supplemented by inserting the following as a line item on the table at the bottom of the page, together with the corresponding footnote disclosure:
Unlevered Free Cash Flow (3) $ (26 ) $ 57 $ 42 $ 48 $ 96 $ 183
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(3) The Company defines unlevered free cash flow as Adjusted EBITDAX less Capital
Expenditures, less changes in net working capital less cash taxes (reflects
cash taxes on earnings including interest income/expense; unlevered free cash
flow reflecting cash taxes on earnings excluding interest income is
approximately $(26) , $57 , $42 , $48 , $95 and $180 for the second half of the
fiscal year 2019 and full fiscal years 2020, 2021, 2022, 2023 and 2024,
respectively).
The disclosure on page 70 of the Proxy Statement is hereby supplemented by inserting the following as a line item on the table in the upper portion of the page, together with the corresponding footnote disclosure:
Unlevered Free Cash Flow (3) $ (26 ) $ 66 $ 84 $ 107 $ 153 $ 230 (3) The Company defines unlevered free cash flow as Adjusted EBITDAX less Capital
Expenditures, less changes in net working capital less cash taxes (reflects
cash taxes on earnings including interest income; unlevered free cash flow
reflecting cash taxes on earnings excluding interest income/expense is
approximately $(26) , $67 , $84 , $106 , $151 and $229 for the second half of the
fiscal year 2019 and full fiscal years 2020, 2021, 2022, 2023 and 2024,
respectively).
The disclosure on page 116 of the Proxy Statement is hereby supplemented by revising the text of footnote 2 in its entirety as follows:
JVL, indirectly through its investment management arrangements with
Forward-Looking Statements
This Current Report on Form 8-K includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. All statements, other than statements of historical fact, are forward-looking statements that contain our current expectations about future results. These forward-looking statements are based on certain assumptions and expectations made by the Company, which reflect management's experience, estimates and perception of historical trends, current conditions and anticipated future developments. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or anticipated in the forward-looking statements. These risks and uncertainties include, but are not limited to, the following: (i) the Company may be unable to satisfy the conditions to closing, including that a governmental entity may prohibit, delay or refuse to grant a necessary regulatory approval; (ii) the proposed transaction may involve unexpected costs, liabilities or delays; (iii) the Company's business may suffer as a result of uncertainty surrounding the proposed transaction; (iv) the risk that the proposed transaction disrupts the Company's current plans and operations or diverts management's or employees' attention from ongoing business operations; (v) the risk of potential difficulties with the Company's ability to retain and hire key personnel and maintain relationships with suppliers and other third parties as a result of the proposed transaction; (vi) the risk that Parent's committed financing will not close; (vii) stockholder litigation in connection with the proposed transaction may affect the timing or occurrence of the proposed transaction or result in significant costs of defense, indemnification and
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liability; (viii) the Company may be adversely affected by other economic, . . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. Exhibit Number Description of Exhibit 99.1 Complaint filed byJennifer Burfeind onNovember 14, 2019 in theUnited States District Court for the District of Delaware 99.2 Complaint filed byAdam Franchi onNovember 15, 2019 in the UnitedStates District Court for the District of Delaware 5
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