STR Shareholders -- August 9, 2025

 

What It Implies for STR Shareholders

1. 

Private Ownership

• Sitio will cease to be publicly traded, becoming a wholly owned subsidiary of the merged entity.

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2. 

Equity in Combined Company

• Sitio shareholders will own approximately 20% of the new combined company, with Viper shareholders holding the remaining ~80%.

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3. 

Potential Value Uplift

• A J.P. Morgan valuation analysis suggests:

  • ~10.5% value creation for Sitio shareholders under “Strip Pricing”

  • ~3.6% under a more conservative “Consensus Pricing” scenario.

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4. 

Immediate Dividend Boost

• As part of the merger announcement, Viper raised its base dividend by 10%, from around $1.20 to $1.32 annually (or $0.33 per quarter).

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5. 

Size and Scale Benefits

• Combined, the entity gains ~85,700 net royalty acres in the Permian Basin, expected production of 64–68 thousand barrels/day by Q4 2025, and $50 million+ in annual synergies. The merger is expected to be 8–10% accretive to cash distributions.

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6. 

Governance and Legal Considerations

• Sitio shareholders face the loss of liquidity and independent public governance.

• Some shareholders have filed litigation seeking more disclosures before approving the merger. Sitio has voluntarily supplemented proxy documents in response.

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