SCHEDULE 13D: WhiteHawk Entities Launch Tender Offer to Acquire PHX Minerals Inc. for $4.35 Per Share, Securing 10.1% Stake

WhiteHawk Income Corporation and its subsidiaries have initiated a cash tender offer to acquire all outstanding shares of PHX Minerals Inc. for $4.35 per share, with key stockholders supporting the transaction.

Summary

• WhiteHawk Income Corporation (WHIC), WhiteHawk Acquisition, Inc. (Parent), and WhiteHawk Merger Sub, Inc. (Merger Sub) have entered into a Merger Agreement with PHX Minerals Inc. (the Issuer) to acquire all outstanding shares.
• The acquisition will occur through a cash tender offer (the Offer) at a price of $4.35 per share, net to the holder, without interest and subject to tax withholding.
• Following the successful tender offer, Merger Sub will merge into PHX Minerals Inc., with PHX Minerals Inc. continuing as a wholly-owned subsidiary of Parent.
• The total funds required for the Offer and Merger are approximately $204.2 million, plus related fees and expenses, to be funded by cash on hand, Debt Financing, and Equity Financing.
• Prior to the Merger Agreement, WhiteHawk Equity Holdings, LP (WhiteHawk LP) engaged in 'Preceding Transactions' from April 26, 2024, through December 12, 2024, acquiring shares totaling approximately $3.1 million.
• Current directors and executive officers of PHX Minerals Inc. (Supporting Stockholders) have entered into Tender and Support Agreements, agreeing to tender their beneficially owned shares (approximately 4.2% of outstanding shares) and vote in favor of the merger.
• The Acquisition Parties (WHIC, Parent, Merger Sub) are deemed to beneficially own 3,817,642 shares, representing approximately 10.1% of PHX Minerals Inc.'s outstanding common stock as of May 8, 2025.
• Daniel Herz, as President, CEO, and Managing Member of WhiteHawk Energy and CEO of WHIC, is deemed to beneficially own an aggregate of 4,764,248 shares, representing approximately 12.6% of the outstanding shares.
• Upon completion of the Merger, PHX Minerals Inc. shares will no longer be traded on the New York Stock Exchange, and there will be no public market for the shares.
• Time-Based Restricted Shares, Performance-Based Restricted Shares, and DCP Units of the Issuer will be converted into cash awards at the Merger Consideration plus accrued dividends, with specific vesting and payment terms.

Sentiment

Score: 8

Explanation: The sentiment is highly positive for the acquirer, as they are moving forward with a strategic acquisition with significant shareholder support. For the target company's shareholders, it offers a clear cash exit at a defined price, which can be positive depending on their investment horizon and expectations.

Positives

• The tender offer provides a clear cash exit strategy for PHX Minerals Inc. shareholders at a specified price of $4.35 per share.
• The support agreements from current directors and executive officers, representing approximately 4.2% of outstanding shares, indicate strong internal alignment with the acquisition.
• The transaction aims to maximize stockholder value through corporate consolidation, as stated by the Holding Parties.

Negatives

• Upon completion of the merger, PHX Minerals Inc. shares will be delisted from the New York Stock Exchange, eliminating the public market for its shares.
• Shareholders will no longer have an equity interest in the company post-merger, losing potential future upside from independent operations.

Risks

• The Offer is subject to customary conditions, including a 'Minimum Condition' requiring at least a majority of outstanding shares to be validly tendered and not withdrawn.
• The Offer and Merger are contingent on the absence of any prohibitive laws or orders from governmental entities.
• The accuracy of the Issuer's representations and warranties and its compliance with covenants in the Merger Agreement are conditions to the Offer.
• The absence of any event, development, or circumstance that would have a material adverse effect on the Issuer is a condition.
• The Board's recommendation of the Offer must not be withheld or withdrawn, nor can they approve a third-party acquisition proposal.

Future Outlook

The Acquisition Parties intend to consummate the merger as promptly as practicable following the successful completion of the tender offer, subject to the satisfaction or waiver of certain conditions. Post-merger, PHX Minerals Inc. will become a wholly-owned subsidiary of Parent, its shares will be delisted from the NYSE, and its registration under the Exchange Act will be terminated.

Industry Context

This acquisition represents a consolidation event within the mineral and royalty interests sector, aligning with WhiteHawk Energy's principal business of acquiring such interests. Such transactions are common in the energy sector as companies seek to optimize portfolios, achieve economies of scale, or gain control over specific asset bases.

Corporate Governance

Related Party Transactions

• The Tender and Support Agreements were entered into by Parent and Merger Sub with all current directors and executive officers of PHX Minerals Inc. (Supporting Stockholders), who are considered related parties due to their management and board positions.

Stakeholder Impact

• **Shareholders**: Will receive $4.35 per share in cash for their common stock, providing a liquidity event. Those holding restricted shares or DCP Units will also receive cash consideration. The public market for shares will cease to exist.
• **Employees**: The document does not explicitly detail impact on employees, but a merger typically involves integration and potential restructuring.
• **Customers/Suppliers**: The document does not explicitly detail impact on customers or suppliers, but the change in ownership could lead to changes in operational strategies or relationships.
• **Creditors**: The document mentions 'Debt Financing' as a source of funds, indicating potential changes to the company's debt structure post-merger.

Next Steps

• Merger Sub will commence the cash tender offer, which will initially remain open for a minimum of 20 business days.
• The Acquisition Parties will file tender offer materials on Schedule TO with the SEC upon commencement of the Offer.
• PHX Minerals Inc. will file a Solicitation/Recommendation Statement on Schedule 14D-9 with the SEC.
• As promptly as practicable following the consummation of the Offer, Merger Sub will merge with and into PHX Minerals Inc.
• Following the Merger, PHX Minerals Inc. shares will be delisted from the NYSE, and its registration under the Exchange Act will be terminated.

Key Dates

Recommendation

Keywords

PHX Minerals Inc., WhiteHawk Income Corporation, Tender Offer, Merger Agreement, Acquisition, SEC Schedule 13D, Common Stock, Shareholder Value, Corporate Consolidation, Oil and Gas, Mineral and Royalty Interests