Permian Basin Royalty Trust receives Schedule13D for business combination

Permian Basin Royalty Trust (PBT) trustee Argent Trust has received a Schedule 13D filed with the SEC on May 18 by SoftVest, a unitholder of the Trust, and certain other parties disclosing that SoftVest and Blackbeard Holdings have agreed to a preliminary non-binding term sheet that sets forth the proposed high-level material terms and conditions governing a potential business combination of the Trust and certain Blackbeard assets. The term sheet contemplates the formation of a new corporation that would be owned in part by Trust unitholders, and in part by Blackbeard and its affiliates that would acquire and own (i) all of the assets and operations of the Trust, and (ii) US Land Guild, or USLG, a wholly owned subsidiary of Blackbeard that will own approximately 66,500 acres of surface estate and a 15% royalty interest associated with certain acreage and certain mineral interests currently owned by Blackbeard or one of its affiliates. The term sheet provides for Blackbeard or its affiliates to receive certain working interests owned by the Trust following the conversion of net profits interests into a cost free 15% royalty interest, including those associated with the “West Ranch” and “East Ranch” properties. The Trustee anticipates that the proposed business combination would require approval of Trust unitholders. Such approval would likely require the approval of a majority in interest of Trust unitholders constituting a quorum at a meeting of unitholders where a quorum is present.