Shares of SandRidge Energy Plunge on Acquisition Announcement

Shares of SandRidge Energy Plunge on Acquisition Announcement

Shares of independent oil and gas producer SandRidge Energy (NYSE: SD) are down 15.4% as of 1 p.m. EST today after the company announced earlier that it will acquire Bonanza Creek Energy (NASDAQ: BCEI) for $746 million. Today's decline suggests Wall Street isn't too keen on the plan.

As part of the deal, SandRidge will acquire Bonanza in a cash and stock deal where Bonanza Creek investors will receive $36 per share, $19.20 of which will be in cash. According to the details of the deal, SandRidge will take out about $274 million in debt to complete the transaction. SandRidge says that the deal will give it access to the Niobrara shale basin in northeast Colorado and will add oil exposure to SandRidge's gas-heavy assets.

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Source: Fool.com