DEFA14A: Viper Energy Addresses Stockholder Lawsuits, Supplements Proxy Statement for Endeavor Energy Acquisition

Viper Energy supplements its proxy statement related to the proposed acquisition of Endeavor Energy Resources' subsidiaries to address stockholder lawsuits alleging material omissions.

Summary

• Viper Energy is supplementing its proxy statement related to the proposed acquisition of Endeavor Energy Resources' subsidiaries.
• This action is in response to demand letters and lawsuits from purported stockholders alleging material omissions in the original proxy statement.
• The supplemental disclosures aim to moot these claims, avoid costs and distractions, and prevent delays in closing the acquisition.
• Viper maintains that the original disclosures comply with applicable law and that the allegations are without merit.
• The supplemental information includes details regarding the engagement of Hunton Andrews Kurth LLP, and additional information regarding the financial analysis performed by Evercore.
• A special meeting of Viper's stockholders will be held on May 1, 2025, to vote on matters necessary to complete the acquisition.

Sentiment

Score: 5

Explanation: The sentiment is neutral. While the company is facing legal challenges, it is taking proactive steps to address them. The company maintains that the original disclosures were compliant with applicable laws and exchange rules.

Positives

• Viper Energy is proactively addressing stockholder concerns to ensure the timely completion of the proposed acquisition.
• The company is supplementing disclosures to avoid potential delays and associated costs.
• Viper believes the original disclosures were compliant with applicable laws and exchange rules.

Negatives

• Viper Energy is facing demand letters and lawsuits from stockholders alleging material omissions in the proxy statement.
• These legal challenges could potentially delay or complicate the proposed acquisition.
• The need to supplement the proxy statement suggests potential weaknesses in the initial disclosures.

Risks

• The pending litigation could result in further delays or prevent the completion of the acquisition.
• Additional demand letters or complaints could be received by Viper.
• The acquisition may not achieve the anticipated benefits within the expected time periods or at all.
• Uncertainties exist regarding the pro forma results for the acquisition and Viper's operating and financial expectations following the acquisition.

Future Outlook

The company anticipates completing the Pending Drop Down, but the timing and terms are subject to various risks and uncertainties, including obtaining stockholder approval and satisfying other conditions.

Management Comments

• Viper believes that the disclosures set forth in the Proxy Statement comply fully with applicable law and exchange rules.
• Viper specifically denies all allegations in the Demand Letters and the Complaints that any additional disclosure was or is required.

Industry Context

The document references precedent transactions involving oil and gas mineral and royalty assets or companies with operations focused in the Permian Basin, indicating the strategic importance of this region for Viper Energy and its peers.

Comparison to Industry Standards

• Evercore's financial analysis includes a selected publicly traded companies analysis, benchmarking Viper against companies like Black Stone Minerals, Freehold Royalties, Kimbell Royalty, PrairieSky Royalty, and Sitio Royalties.
• The analysis compares TEV/EBITDAX and Price/CFPS multiples to industry medians.
• Evercore reviewed selected transactions involving oil and gas mineral and royalty assets or companies with operations focused in the Permian Basin with transaction values equal to or greater than $150 million announced since January 1, 2019.

Legal Proceedings

• Viper Energy is facing demand letters and lawsuits from purported stockholders alleging material omissions in the Proxy Statement.
• The Complaints are captioned as Garfield vs. Viper Energy, Inc. Case No. 25000481CA (Fla. 20th Cir. Ct. Apr 14, 2025) (the Garfield Complaint); Thomas v. Viper Energy, Inc. et. al. Case No. 652281/2025 (Sup. Ct. New York Cnty. 2025) (the Thomas Complaint); and Miller v. Viper Energy, Inc. et. al. Case No. 652286/2025 (Sup. Ct. New York Cnty. 2025) (the Miller Complaint).

Stakeholder Impact

• The outcome of the stockholder vote and the legal proceedings will directly impact Viper Energy's shareholders.
• The completion of the acquisition could affect the company's employees, customers, and suppliers.

Next Steps

• Viper will hold a special meeting of stockholders on May 1, 2025, to vote on matters related to the proposed acquisition.
• The company will continue to defend against the stockholder lawsuits.
• Viper will monitor for any additional demand letters or complaints.

Key Dates

Keywords

Viper Energy, Endeavor Energy Resources, acquisition, proxy statement, stockholder lawsuits, supplemental disclosures, merger, oil and gas, royalties, Evercore, Diamondback Energy