I would not have believed what I read in the WSJ today on the merging of Parsley Energy and Pioneer. This merger will not require the exchange of cash rather it will be an equity exchange; probably 1 share of PNR for 5 shares of Parsley Energy. Pioneer will maintain control but Parsley will get seats on the Board of Directors, or it will be packed. There will be some expensive GOLDEN PARACUTES funded as both companies will have senior staff that will want to bail after the merger. They are called GOLDEN PARACHUTES for a reason because they will cost the stockholders MILLIONS of Dollars in stock equity and Cash on hand.
MY PREDICTIONS POST MERGER:
There will be a 3.0 layoff in the 1st Qtr. 2021 to take advantage of the economy of scale in all the G&A Departments. The packaged layoff will push another 300-350 employees out the door in the 2nd Qtr. 2021. Packages will be excellent similar to 1.0 and 2.0. The new company will have a lower stock price for a time being. Pioneer in the high 60 low 70s
Pioneer's COB, CEO, and COO will take the golden chutes, the replacement will be either Parsleys Matt or the son of SS. But, I am guessing the son of SS will also take a chute.
A new management team will be forged from the best remaining at the new company many of them X-Pioneer hands . If Matt becomes CEO of the new company; some of Pioneer nonfunctional EVP and VP will bail with chutes. It would be a good time to clean up after those legacy EVP and VP, their guidance has not been good of recent.
I am undecided if the new company will maintain multiple basin or stay just in the Permian, better future if they play multiple basins. The Austin Office will close, the Mrs. will have to learn to love Dallas or Midland.
The combined company will have a equity value of around 30-35 billion dollars, not a poison pill but enough to keep the big sharks away and keep it in the family. The new company will carry more debt to service.
Will this deal trigger a change of ownership in PNR stock which means all your unvested stock options matures and are paid out promptly, this will be an SEC ruling. Pioneer PROBABLY HOPES NOT?
New companies name "BASIN SHALE PETROLEUM PE & PNR"
If you just packaged keep and eye on your unvested stocks that you did not receive, it may be your money.