September 29, 2020
Via Email
Garrett DeVries
Akin Gump Strauss Hauer Feld LLP
2300 N. Field Street, Suite 1800
Dallas, Texas 75201
Re: Transatlantic Petroleum Ltd.
PREM14A filed September 22, 2020
File No. 1-34574
Schedule 13E-3 filed September 23, 2020
Filed by TAT Holdco LLC, et al.
File No. 5-79343
Dear Mr. DeVries:
The staff in the Office of Mergers and Acquisitions has conducted a
limited review of the
filings listed above. We have limited our review of your proxy statement and
Schedule 13E-3 to
those issues we have addressed in the comments below. In some of our comments,
we may ask
you to provide us with information so we may better understand your disclosure.
Please respond to this letter within ten business days by amending your
filings, by
providing the requested information, or by advising us when you will provide
the requested
response. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your response.
After reviewing any amendment to your filings and the information you
provide in
response to these comments, we may have additional comments. Defined terms used
here have
the same meaning as in your proxy statement.
Schedule 13E-3 filed September 23, 2020 - General
1. Please supplementally explain why you have not included Jonathon T. Fite
as a filer on
the Schedule 13E-3. We note that Mr. Fite is a member of the current
Board of Directors,
a member of the Preferred Shareholder Group that entered into the
agreement with the
Company to approve this merger and formed Merger Sb, as well as a control
person of
filer KMF Investment Partners, LP. Provide the requested analysis or
alternatively, add
Garrett DeVries, Esq.
Akin Gump Strauss Hauer Feld LLP
September 29, 2020
Page 2
Mr. Fite as a filer on the Schedule 13E-3 and ensure he provides
(either in the proxy
statement or otherwise) all of the disclosure required by the
Schedule.
Preliminary Proxy Statement filed September 22, 2020
General
2. Please fill in the blanks throughout the proxy statement, including as to
the number and
percentage of shares held by the Company s executive officers and
directors.
Information that is subject to change may be bracketed to highlight this
fact.
3. Briefly describe the second proposal to adjourn the special meeting, why
you have
included it and your recommendation on that proposal.
Summary Term Sheet Vote Required, page 3
4. Here and in the corresponding section on page 53, clarify what percentage
of the required
vote of common shareholders is assured by virtue of the shares held by
participants in the
transaction. In this regard, it is not clear whether the figures that
appear in the beneficial
ownership table later in the proxy statement reflect the common shares
underlying the
preferred shares those individuals hold.
Merger Consideration, page 4
5. Where you discuss the merger consideration, including in this section,
note that it
represents a 62% discount to the trading price of the common shares on
the last trading
day before announcement of the merger.
Interests of the Company s Directors and Executive Officers in the Merger,
page 10
6. Quantify the percentage of shares of the surviving entity that each
insider will own after
the consummation of the merger. Make the same change in the corresponding
section of
the proxy statement that currently appears on page 44.
Appraisal Rights, page 11
7. Clarify whether shareholders who do not vote by proxy or at the special
meeting (versus
those who vote against the merger) can exercise appraisal rights. Make
the same revision
in the corresponding section later in the proxy statement on page 60.
Who will own the Company after the merger?, page 16
8. See our comment above. Identify by name the current executive officers
and directors of
the Company, their current positions, and their stake in the surviving
entity after the
merger.
Garrett DeVries, Esq.
Akin Gump Strauss Hauer Feld LLP
September 29, 2020
Page 3
Special Factors Background to the Merger, page 21
9. Refer to the first paragraph in this section. Expand to describe the
potential strategic
alternatives the Company explored but elected not to pursue in favor
of the merger.
10. The disclosure on page 21 indicates that in April 2018, the Company
received several
proposals to acquire certain of the Company s assets, including
an offer to acquire the
entire Company from Mr. Mitchell, subject to obtaining financing. It
appears that Mr.
Mitchell and his affiliates filed a Schedule 13D/A on December 6, 2017
and next
amended that Schedule on August 20, 2018. Supplementally explain why Mr.
Mitchell
apparently did not amend his Schedule 13D to reflect the fact that he
had made a proposal
to acquire the Company until the amendment filed on August 20, 2018,
despite that it
appears the proposal was made in April 2018.
11. Summarize the material terms of the April 2018 proposal to acquire the
Company by Mr.
Mitchell and his affiliates.
12. Revise to expand the explanation of why the Company elected not to
pursue any of the
third-party proposals received in 2018 (other than Mr. Mitchell s for
which you state he
could not obtain financing). Be specific about the terms of the rejected
proposals and the
adverse tax consequences you cite as the reasons for rejection of
those alternatives.
13. Refer to the disclosure on page 21. Explain when and how the Board
apparently reversed
its decision in November 2018 that continuing to explore and develop
the Company s
drilling inventory was the best opportunity to maximize shareholder
value.
14. Explain the Company s decision not to solicit alternative third-party
proposals in
December 2019, when it received another proposal from Mr. Mitchell. We
note the
disclosure that the auction process in 2018 did not yield an acceptable
proposal, but that
occurred more than a year before.
15. For each of the prior proposals made by Mr. Mitchell and his affiliates,
provide a per
share valuation based on the number of shares outstanding when the
proposal was made
(versus the potential for dilution based on issuance of new common
shares as dividends
on the Company s preferred shares).
16. Refer to page 23. Briefly describe the reimbursement agreements proposed
by the
Company during the negotiations with Mr. Mitchell and his affiliates.
17. Refer to the disclosure at the bottom of page 25. Summarize the measures
the parties
agreed to in order to address the potential conflict of interest of Mr.
Mitchell as CEO and
owner of the lender to the Company.
Garrett DeVries, Esq.
Akin Gump Strauss Hauer Feld LLP
September 29, 2020
Page 4
Reasons for the Merger; Recommendation of the Special Committee , page 28
18. The Instruction to Item 1014 of Reg. M-A sets forth some factors that
are generally
relevant to fairness. To the extent any one of such factors was not
considered by a filing
party or was given little weight, this may be an important part of the
filer s fairness
analysis that should be explained for shareholders. Please expand this
section to discuss
how each factor listed in the Instruction was considered by the Company,
or was not
considered, and why. We note that you have not addressed most of the
factors, including
liquidation value, net book value or going concern value and you have
not explained how
you analyzed the 62% discount to recent trading prices reflected in the
merger
consideration.
19. Explain how the filing persons analyzed each factor listed. For example,
refer to the last
bullet point on page 28. It is not clear how you analyzed the factors
that you believe
distort the market value of the Company s common stock, such as
limited equity
coverage, particularly since the shares trade so much higher than what
shareholders will
receive in the merger. Please expand to explain.
20. State why the merger is procedurally fair to unaffiliated shareholders
in the absence of
the safeguards set forth in Item 1014(c)-(e) of Reg. M-A. Provide the
same disclosure for
the Acquiring Group and their fairness determination below.
Opinion of Seaport Guardian Energy LLC, page 32
21. Refer to the second paragraph in this section on page 32 where you state
that the fairness
opinion addresses only the fairness, from a financial point of view,
to the holders of
common shares as it relates to the merger consideration to be received
by such
shareholders in the merger However, in the last paragraph on page
23, you state that
pursuant to its engagement letter, Seaport agreed to assist the Special
Committee in its
evaluation of corporate and balance sheet related shareholder value
enhancing
alternatives including, without limitation, providing the Special
Committee with a
preliminary estimated valuation of the Company and its assets as a going
concern. This
aspect of the analysis must be described in considerable detail. See
Item 1015(a) of
Regulation M-A.
22. Significantly expand the summary of each of the preliminary discussion
materials
referenced on page 36 and filed as exhibits to the Schedule 13E-3,
consistent with the
requirements of Item 1015(a) of Regulation M-A. To the extent that one
or more of the
presentations and presentation materials are the same as other
presentations you have
already described in revised disclosure, provide a summary of the
material differences.
Certain Unaudited Prospective Financial Information Concerning the Company,
page 36
23. Summarize the material assumptions and limitations on the projections
disclosed.
Garrett DeVries, Esq.
Akin Gump Strauss Hauer Feld LLP
September 29, 2020
Page 5
Position of the Acquiring Group as to the Fairness of the Merger, page 38
24. See our comment above. Discuss how the Acquiring Group analyzed the
fairness of the
merger consideration in relation to the recent trading price for the
Company s shares,
given that the shares traded at a price 62% higher than the merger
consideration as
recently as last month.
See the Instruction to Item 1014 of Reg. M-A.
25. The Instruction to Item 1014 of Reg. M-A generally sets forth some
factors that are
generally relevant to fairness. To the extent any one of such factors
was not considered
by a filing party or was given little weight, this may be an important
part of the filer s
fairness analysis that should be explained for shareholders. Please
expand this section to
discuss how each factor listed in the Instruction was considered by the
Acquiring Group,
or was not considered, and why.
26. At the top of page 40 where you note that the transaction was structured
to require
informed consent by 75% of the shareholders who vote, disclose what
percentage of
unaffiliated shareholders must approve the merger, given the extensive
insider holdings
in this Company.
27. In the last paragraph in this section on page 40, remove the qualifier
about including all
of the material factors considered by the Acquiring Group. The Acquiring
Group is
responsible for providing this information.
Purposes and Reasons of Acquiring Group for the Merger, page 40
28. State the reasons for the timing of the merger from the perspective of
the Acquiring
Group. See Item 1013(c) of Regulation M-A.
29. Refer to the disclosure on page 41 that before submitting the
transaction proposal, the
Acquiring Group reviewed strategic alternatives that could be
considered to potentially
improve the financial performance and shareholder value of the Company.
List the
alternatives considered and explain why each was not pursued. See Item
1013(b) of Reg.
M-A.
Interest of Directors and Executive Officers in the Merger, page 44
30. Clarify whether Mr. Mitchell, whether directly or through affiliated
entities, also has
made loans to the Company.
31. Quantify the fees paid to the Riata Entities controlled by Mr. Mitchell
during the last
year, to allow shareholders to understand the extent of these related
party transactions.
Garrett DeVries, Esq.
Akin Gump Strauss Hauer Feld LLP
September 29, 2020
Page 6
Opinion of Seaport Annex C
32. We refer to the following language in the first sentence of the last
paragraph of the
fairness opinion included as Annex C to the proxy statement: This
Opinion may not be
used or relied upon by any person other than the Board or the
Committee Please delete
this language in the proxy statement and the attachment.
Alternatively, revise to disclose
the legal basis for Seaport s and the Company s belief that
security holders cannot rely on
the opinion to bring state law actions, including a description of
any state law authority
on such a defense. If no such authority exists, disclose that this
issue will be resolved by
a court, resolution of this issue will have no effect on rights and
responsibilities of the
Company under state law, and the availability of the defense will
have no effect on the
rights and responsibilities of either Seaport or the Company under
the federal securities
laws.
We remind you that the company and other filing persons on the Schedule
13E-3 are
responsible for the accuracy and adequacy of their disclosures in both filings,
notwithstanding
any review, comments, action or absence of action by the staff.
Please contact me at 202-551-3263 with any questions.
Sincerely,
/s/ Christina
Chalk
Christina Chalk
Senior Special
Counsel
Office of
Mergers & Acquisitions
cc: Robert Sarfatis, Esq.
Foley & Lardner LLP
(Via email)