Callon faces pressure to call off Carrizo deal

摘要

PERMIAN player Callon Petroleum is facing pressure from billionaire investor John Paulson's hedge fund after the firm released a letter urging the independent to drop a $3.2 billion proposal to acquire Carrizo Oil and Gas and instead sell itself. On Monday, in a letter to Cal-lon's board, Paulson & Co. said it would vote against the all-stock acquisition of Carrizo, a company that operates in the south Texas Eagle Ford shale play. Paulson holds a 9.5% stake, or 21.6 million shares, in the Houston-based company. The letter noted that the US independent's stock price has fallen by 36% since the announcement of the Carrizo takeover offer on 15 July, adding that the share price drop "underscores investors' deep scepticism of this transaction." The deal would see Carrizo shareholders receive 2.05 Callon shares for each of their own, equating to a price of $13.12 per Carrizo share as of 12 July. Moreover, Paulson in the letter said that if Callon goes forward with the deal that it would lose its premium valuation as a pure play Permian producer.