Apollo Global Management acquires Parallel Petroleum

Parallel is an oil and natural gas exploration and production company, while Apollo is an investment firm. Both Apollo Global and Parallel Petroleum are based in the US.

Update on October 29, 2009:

Apollo, through its newly formed subsidiaries PLLL Holdings, LLC and PLLL Acquisition Co., has completed its subsequent offer to acquire all of the remaining outstanding shares (including the associated preferred stock purchase rights) of Parallel.

As of the expiration of the subsequent offering period, a total of 36,390,826 shares were validly tendered during the initial offering period and subsequent offering period, representing approximately 87.38% of the outstanding shares of Parallel.

PLLL Acquisition will acquire all of the remaining outstanding shares of Parallel by means of a short-form merger under Delaware law.

Update on October 22, 2009:

Apollo, through its newly formed subsidiaries PLLL Holdings and PLLL Acquisition, has completed its tender offer to acquire all of the outstanding shares (including the associated preferred stock purchase rights) of Parallel.

A total of approximately 35,244,824 shares were validly tendered and not withdrawn (including approximately 802,359 shares subject to guaranteed delivery) prior to the expiration of the initial offering period, representing approximately 84.62% of Parallel's outstanding shares.

PLLL Holdings and PLLL Acquisition have commenced a subsequent offering to acquire the remaining shares of Parallel which will expire on October 29, 2009. After expiration of the subsequent offering period, PLLL Acquisition will acquire all of the remaining outstanding shares of Parallel by means of a short-form merger under Delaware law.

Update on September 24, 2009:

Apollo, through its newly formed subsidiaries PLLL Holdings and PLLL Acquisition, has commenced a tender offer to acquire all of the outstanding shares (including the associated preferred stock purchase rights) of Parallel.

The tender offer will expire on October 22, 2009, unless extended.

Announcement (September 15, 2009):

An affiliate of Apollo has entered into a definitive agreement to acquire all of the outstanding shares in Parallel in a transaction valued at approximately $483 million, including the assumption or repayment of approximately $351 million of net indebtedness.

Under the terms of the agreement, Parallel stockholders would receive $3.15 per share in cash, representing a premium of 56% over Parallel's average closing share price over the past thirty trading days and 63% over Parallel's average closing share price over the past sixty trading days.

An affiliate of Apollo will commence a tender offer to purchase for cash all of the outstanding shares of Parallel's common stock, and the associated preferred stock purchase rights, at a price of $3.15 per share, for a total consideration of approximately $132 million.

The tender offer is expected to commence on or before September 24, 2009 and to expire on the 20th business day following and including the commencement date. The funds managed by Apollo have agreed to provide $283.2 million of equity to complete the transaction.

Banc of America Merrill Lynch Securities, Jefferies & Company, Inc., Stonington Corporation and Sunrise Securities Corp. are acting as financial advisors, while Lynch, Chappell & Alsup, P.C. and Haynes and Boone, LLP are acting as legal advisors to Parallel.

RBC Richardson Barr and BNP Paribas S.A. are acting as financial advisors, while Akin Gump Strauss Hauer & Feld LLP is acting as legal advisor to Apollo.

Deal Value (US$ Million) 483
Deal Type                Private Equity
Sub-Category             Going Private
Deal Status              Completed: 2009-11-25

Deal Participants

Target (Company) Parallel Petroleum Corporation

Bid Premium ($ per share) 10.9

For full details on Parallel Petroleum Corp (PLLL) PLLL. Parallel Petroleum Corp (PLLL) has Short Term PowerRatings at TradingMarkets. Details on Parallel Petroleum Corp (PLLL) Short Term PowerRatings is available at This Link.