 Shares of Southwestern Energy Co. sank 5.6 in premarket trading Wednesday, after the natural gas and oil exploration company announced a stock deal to buy Montage Resources Corp. and said it was launching a 55 million share offering as part of that deal. Under terms of the merger, Montage shareholders will receive 1.8656 Southwestern shares for each Montage share they own. Based on Tuesdays stock closing prices, the terms would value Montage shares at 5.67 each, which is a 5 discount, and would value Montage at about 204.3 million. Montages stock dropped 7.5 in the premarket. Southwestern said the proceeds from the 55 million share offering, which represents about 10 of the shares outstanding, will be used to retire a portion of Montages 8.875 senior notes due 2023. If the merger doesnt close, Southwestern will use the proceeds from the offering for general corporate purposes, including paying down debt. The deal is currently expected to close in the fourth quarter of 2020. Year to date, Southwesterns stock has rallied 25.6 through Tuesday, while Montage shares have fallen 24.8 and the SP 500 has gained 3.2. 