Rattler Midstream LP (NASDAQ: RTLR) is a Delaware limited partnership originally formed by Diamondback Energy to acquire, develop, own and operate midstream infrastructure assets. Rattler maintains ownership in oil & gas and water-based midstream assets located in the Permian Basin.
Shares of the midstream operator are rallying 17% through early trading on Monday, May 16, 2022. Over the past three months, Rattler Midstream has seen average daily volume of 316,580 shares. However, volume of 983,638 shares or dollar volume of around $14.79 million, has already exchanged hands through early trading.
Rattler Midstream shares are gaining after the LP entered into a definitive agreement to be acquired by Diamondback Energy in an all-stock transaction valued at $2.2 billion. Diamondback Energy will acquire all publicly-listed limited partner interests. In exchange, unit holders will receive 0.113 of a share of common stock in Diamondback for each Rattler common unit held. Overall, the all-stock agreement gives the transaction a value of $2.2 billion.
Given the existing relationship between the two entities, Diamondback’s Conflicts Committee of its board of directors, which are held by independent directors, unanimously approved the merger after consultation with its independent legal and financial advisors. The transaction is estimated to close during the third quarter of 2022.
“The energy landscape has transformed dramatically since Rattler was taken public in 2019, and we believe this agreement to merge companies is in the best interests of both Diamondback and Rattler stakeholders,” stated Travis Stice, Chief Executive Officer of Diamondback and of the general partner of Rattler. “This merger will allow both companies to benefit from the simplicity and scale of the combined entity going forward.”
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