SilverBow has sought to distract from the
issues that plague the Company and that require new, qualified,
independent board members: namely chronic underperformance,
negative TSR, poor capital allocation and worst-in-class
governance
This proxy contest was initiated prior to
discussions of a KTG combination, and is solely focused on fixing
the Company and creating shareholder value
Urges shareholders to vote "FOR" all three of
Kimmeridge's highly qualified, independent nominees to SilverBow's
nine-person staggered board on the GOLD proxy card
NEW
YORK and DENVER,
May 13,
2024 /PRNewswire/ -- Kimmeridge, an alternative asset
manager focused on the energy sector and the largest shareholder of
SilverBow Resources (NYSE: SBOW) ("SilverBow" or the "Company")
holding 12.9% of outstanding shares, today issued the following
letter to shareholders:
Fellow Shareholders,
Throughout our engagement with SilverBow over the past two
years, Kimmeridge's goal has been clear and consistent: to
position the Company for a sustainable future and drive value
creation for ALL shareholders.
Unfortunately, rather than engage constructively, the SilverBow
Board of Directors ("Board") has continued its long-standing
pattern of prioritizing self-preservation over shareholder returns.
In recent weeks, the incumbent Board has repeatedly misled
shareholders about Kimmeridge's actions and intent.
False Claim 1: SilverBow asserts that Kimmeridge
nominated directors to the Board solely to force a combination with
Kimmeridge Texas Gas ("KTG" and the "KTG Combination").
The Facts: Kimmeridge privately informed the Company on
January 31, 2024 that it was planning
to nominate directors to the Board and, on February 16, 2024, submitted its formal
nomination notice to the Company.1 Following the
submission of Kimmeridge's nomination notice, the Board met
with Kimmeridge on February 21, 2024,
and Kimmeridge privately outlined eight potential strategic
transactions the Company could pursue to drive value, including the
KTG Combination. During this meeting, the Board requested that
Kimmeridge submit a proposal regarding the KTG Combination in
writing.
On February 26, 2024, SilverBow CEO Sean
Woolverton called Kimmeridge founder Ben Dell to request a formal proposal for the
KTG Combination. At this time, Mr. Woolverton and the Board were
well aware that Kimmeridge had submitted nominees for election at
SilverBow's 2024 Annual Meeting of Shareholders (the "Annual
Meeting").
On March 13, 2024, following the
Board's request, Kimmeridge delivered a financed, premium proposal,
which mirrored the terms previewed with the Board on February 21, 2024.
Make no mistake – the Board invited an offer from
Kimmeridge with no intent of engagement or negotiation on
the KTG Combination, knowing that it was facing a proxy contest,
and then misstated this timeline to proxy advisors and
shareholders, to misrepresent Kimmeridge's intent.
False Claim 2: SilverBow stated that in January 2024 Kimmeridge threatened to take
control of the Board through a proxy battle and did not engage in
settlement discussions.
The Facts: Contrary to what SilverBow claims, in emails
sent on February 9, 2024 and
February 13, 2024, Kimmeridge
outlined a settlement to avoid a proxy contest; SilverBow ignored
these overtures. Specifically, Kimmeridge requested that SilverBow
appoint one new independent director and immediately de-stagger the
Board or appoint two directors, one new and one replacement, and
undertake a phased de-staggering of the Board.
Additionally, Kimmeridge asked the Company to consider removing
the poison pill and offered to commit itself to a standstill as a
show of good faith. Kimmeridge never implied in its
communications that the proxy contest would be used to take control
of the Company.
False Claim 3: SilverBow stated that Kimmeridge
threatened to take control of the Company through a tender offer on
March 31, 2023.
The Facts: This is patently false: Kimmeridge never made
such a statement or even raised the prospect of acquiring the
Company through a tender offer – on March
31, 2023 or otherwise. Moreover, executing a tender offer
without the Company's consent would not even have been possible
considering there was and continues to be a poison pill in place.
Kimmeridge has only made proposals to SilverBow at the Board's
request.
False Claim 4: The Board adopted a short duration poison
pill to prevent Kimmeridge from acquiring the Company without
paying any control premium.
The Facts: In 2022, Kimmeridge thought it was negotiating
a zero-premium merger between SilverBow and KTG. Prior to any
meaningful engagement, the Board adopted what Kimmeridge
understands to be the industry's only poison pill. Kimmeridge has
not acquired any shares in over 670 days, even though its ownership
sits well below the poison pill's 15% trigger.
SilverBow's poison pill has never been about protecting
shareholders' interests from a no-premium hostile takeover. It is
about protecting management and the Board. SilverBow will never
submit the poison pill to a shareholder vote because the Board
knows shareholders won't support it. The Board unilaterally
extended its long-term poison pill and has now conveniently
scheduled the poison pill to expire the day after the Annual
Meeting, but it will most likely be unilaterally extended – once
again – by the Board.
Kimmeridge's nominees are more qualified, more knowledgeable and
more independent than SilverBow's incumbent slate. After 7 years of
negative total shareholder returns, the lowest EV/EBITDA multiple
of its peer group and a fortress of terrible governance,
shareholders deserve robust, independent oversight in the
boardroom.
Kimmeridge's nominees are E&P industry leaders who can
create sustained value for all SilverBow shareholders against the
backdrop of a rapidly evolving landscape. They are bound to no
agenda other than robustly executing their fiduciary duty and
representing the best interests of the Company and all of its
shareholders.
Kimmeridge urges shareholders to vote "FOR" all three of
its highly-qualified nominees — Douglas
Brooks, Carrie Fox, and
Katherine Minyard — and
"WITHHOLD" on all of SilverBow's Directors — Gabriel Ellisor, Kathleen McAllister, and Charles Wampler — on the GOLD proxy card.
Instructions on how to vote can be found at
https://kimmeridge.com/sbow/.
1
https://www.sec.gov/Archives/edgar/data/351817/000090266424001905/p24-0923sc13da.htm
Additional information
Additional information regarding Kimmeridge's definitive proxy
statement can be found at www.Kimmeridge.com/sbow/. If you
have any questions or require any assistance with voting your
shares, please contact our proxy solicitor, Saratoga Proxy
Consulting LLC, at (212) 257-1311, or (888) 368-0379 (toll free) or
by email at info@saratogaproxy.com.
About Kimmeridge
Founded in 2012 by Ben Dell, Dr.
Neil McMahon and Henry Makansi, Kimmeridge is an alternative
asset manager focused on the energy sector. The firm is
differentiated by its direct investment approach, deep technical
knowledge, active portfolio management, proven sustainability track
record and proprietary research and data gathering.
Media
Daniel Yunger /
Anntal Silver / Emma Cloyd
Kekst CNC
Kekst-Kimmeridge@kekstcnc.com
Investors
John Ferguson
Saratoga Proxy Consulting LLC
jferguson@saratogaproxy.com
(212) 257-1311
Cautionary Statement Regarding Forward-Looking
Statements
This press release does not constitute an offer to sell or
solicitation of an offer to buy any of the securities described
herein in any state to any person. The information herein contains
"forward-looking statements". Specific forward-looking statements
can be identified by the fact that they do not relate strictly to
historical or current facts and include, without limitation, words
such as "may," "will," "expects," "believes," "anticipates,"
"plans," "estimates," "projects," "potential," "targets,"
"forecasts," "seeks," "could," "should" or the negative of such
terms or other variations on such terms or comparable terminology.
Similarly, statements that describe our objectives, plans or goals
are forward-looking. Forward-looking statements are subject to
various risks and uncertainties and assumptions. There can be no
assurance that any idea or assumption herein is, or will be proven,
correct or that any of the objectives, plans or goals stated herein
will ultimately be undertaken or achieved. If one or more of such
risks or uncertainties materialize, or if Kimmeridge underlying
assumptions prove to be incorrect, the actual results may vary
materially from outcomes indicated by these statements.
Accordingly, forward-looking statements should not be regarded as a
representation by Kimmeridge that the future plans, estimates or
expectations contemplated will ever be achieved.
Important Information
Kimmeridge Energy Management Company, LLC, KEF Investments, LP,
KEF Fund V Investments, LP, Benjamin
Dell, Alexander Inkster, Neda
Jafar, Denis Laloy, Noam Lockshin, Henry
Makansi, Neil McMahon,
Douglas E. Brooks, Carrie M. Fox and Katherine L. Minyard (collectively, the
"Participants") have filed a definitive proxy statement and
accompanying GOLD proxy card (the "Proxy Statement") with the
Securities and Exchange Commission (the "SEC") to be used to
solicit proxies in connection with the 2024 annual meeting of
shareholders of SilverBow Resources, Inc. (the "Company").
Shareholders of the Company are advised to read the Proxy Statement
and other documents related to the solicitation of proxies with
respect to the Company by the Participants because they contain
important information, including additional information related to
the Participants and a description of their direct or indirect
interests by security holdings or otherwise. Such materials are
available at no charge on the SEC's
website, https://www.sec.gov.
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SOURCE Kimmeridge