Shares of Rice Energy Inc. rocketed 26% in premarket trade Monday, after the oil and natural gas company announced an agreement to be acquired by EQT Corp. in a deal valued at $6.7 billion. Under terms of the deal, EQT will pay 0.37 of its shares and $5.30 in cash for each Rice stock outstanding. Based on Friday's closing prices, that values Rice shares at about $27.04 each, a 37% premium. EQT shares tumbled 6.4% ahead of the open. EQT said it will assume or refinance about $1.5 billion of debt and preferred equity. The deal is expected to close in the fourth quarter. EQT will obtain Rice's midstream assets, which include 92% interest in Rice Midstream GP Holdings LP, which owns 100% of the general partner incentive distribution rights and 28% of the limited partner interests in Rice Midstream Partners LP . "This transaction brings together two of the top Marcellus and Utica producers to form a natural gas operating position that will be unmatched in the industry," said EQT Chief Executive Steve Schlotterbeck. Rice's stock has lost 7.8% year to date through Friday, while EQT shares have dropped 10%, the SPDR Energy Select Sector ETF has tumbled 12% and the S&P 500 has gained 8.7%.
Copyright © 2017 MarketWatch, Inc.
Continue Reading Below