On May 24, 2019, John K. Reinhart, Montage’s President and
Chief Executive Officer, had discussions with Michael L. Hodges,
Montage’s Executive Vice President and Chief Financial Officer,
regarding an internal strategic assessment of a potential
combination of Montage and Company A, a publicly traded independent
exploration and production company, which Montage management
understood to be considering various strategic options.
On June 12, 2019, a financial consultant of Montage, hired to
compile publicly available data in a format for preliminary
assessment, provided Mr. Reinhart a preliminary background
analysis of Company A.
On July 1, 2019, Mr. Reinhart contacted Company A’s Chief
Executive Officer regarding an introductory meeting.
On August 8, 2019, Mr. Reinhart and Company A’s Chief
Executive Officer met and discussed Company A’s strategy
moving forward, potential synergies that could be realized in a
combination of Montage and Company A, the importance of scale
in the industry, and potential consolidation opportunities.
On August 13, 2019, Mr. Reinhart had a telephone call
with D. Martin Phillips and Mark E. Burroughs, Jr., directors of
Montage and principals of EnCap, Montage’s largest beneficial
stockholder, regarding the stated intent of Company A’s Chief
Executive Officer to reach out to Messrs. Phillips and Burroughs
for discussions. Following this call, on August 14, 2019,
Company A’s Chief Executive Officer had a discussion with Messrs.
Phillips and Burroughs regarding potential acquisitions of Montage
and other portfolio companies of EnCap. This discussion resulted in
minimal continued dialogue until late January 2020, as discussed
On December 6, 2019, representatives of Company B, a publicly
traded independent exploration and production company, and its
financial advisor met in person with representatives of EnCap,
which meeting was arranged by Company B’s financial advisor, to
discuss general matters and a potential acquisition of, or merger
with, Montage. At the meeting, representatives of EnCap deferred
conversation regarding any potential strategic transaction
involving Montage to Mr. Reinhart.
On December 10, 2019, the Chief Executive Officer of Company B
invited Mr. Reinhart to meet in person, and on
December 12, 2019, Mr. Reinhart accepted the
On January 9, 2020, Mr. Reinhart, Mr. Hodges, and
Company B’s Chief Executive Officer met in person. At this meeting,
Company B’s Chief Executive Officer presented the concept of a
potential merger with, or acquisition of, Montage using Company B’s
stock as consideration. Discussions at the meeting centered around
Company B’s strategy and the information required to assess
potential synergies that could be realized in the transaction and
associated business combination metrics.
Following a request for a meeting from J. David Cecil,
Southwestern’s then-Executive Vice President, Corporate
Development, Mr. Burroughs and other representatives of EnCap
met with Mr. Cecil on January 15, 2020 and discussed a
potential combination between Southwestern and Montage and/or other
portfolio companies of EnCap.
Following the meeting between Mr. Burroughs and
Mr. Cecil, Mr. Cecil contacted Mr. Reinhart by email
on January 24, 2020 and requested an introductory telephone
call. The introductory call between Mr. Reinhart and
Mr. Cecil was held on January 27, 2020, during which the
parties discussed industry consolidation and scale benefits, as
well as Southwestern’s desire to meet with Montage executives and
learn more about Montage.
On January 27, 2020, Messrs. Reinhart and Hodges also had a
telephone call with representatives of Company B’s financial
advisor to discuss the potential merger or acquisition opportunity
presented during the January 9th meeting between
Mr. Reinhart and Company B’s Chief Executive Officer.
Following this call, the parties exchanged emails regarding data
requests in connection with assessment of the potential merger or
acquisition opportunity and a draft confidentiality agreement from