According to the Complaint, RSP Permian Inc ("RSP") is an independent oil and natural gas company that engages in the acquisition, exploration, exploitation, development, and production of unconventional oil and
associated liquids-rich natural gas reserves in the Permian Basin of West Texas. It owns interest in contiguous acreage blocks in the core of the Midland Basin primarily in the adjacent counties of Midland, Martin, Andrews, Dawson, Ector, and Glasscock; and in Loving and Winkler counties of the Delaware Basin.
On March 28, 2018, RSP and Concho Resources, Inc. ("Concho") issued a press release announcing the Proposed Transaction. The press release stated,"Concho Resources Inc. (NYSE: CXO) and RSP Permian, Inc. (NYSE: RSPP) today announced they have entered into a definitive agreement under which Concho will acquire RSP in an all-stock transaction valued at approximately $9.5 billion, inclusive of RSP’s net debt."
The terms of the Proposed Transaction were memorialized in a March 28, 2018 filing with the Securities and Exchange Commission (“SEC”) on Form 8-K attaching the definitive Agreement and Plan of Merger (the “Merger Agreement”). On April 19, 2018, Concho filed a Registration Statement on Form S-4 (the “S-4”) with the Securities and Exchange Commission (the “SEC”) in support of the Proposed Transaction.
The Complaint alleges that Defendants breached their fiduciary duties to the Company’s stockholders by agreeing to the Proposed Transaction which undervalues RSP and is the result of a flawed sales process. The Complaint further alleges that Defendants caused to be filed the materially deficient S-4 on April 19, 2018 with the SEC in an effort to solicit stockholders to vote their RSP shares in favor of the Proposed Transaction. Specifically, the Complaint alleges that the S-4 omits and/or misrepresents material information concerning, among other things: (a) the sales process leading up to the Proposed Transaction; (b) the Company’s financial projections; (c) Concho’s financial projections; and (d) the data and inputs underlying the financial valuation analyses that purport to support the fairness opinions provided by the Company’s financial advisor.