14th Apr 2014 12:26
LONDON (Alliance News) - Glencore Xstrata PLC Monday reached a agreed deal to acquire Caracal Energy Inc for 550 pence a share, or about GBP808.5 million in cash, ending Caracal's proposed merger with Transglobe Energy Corp and giving it new oil and gas assets in Africa.
Caracal, which operates in Chad, said in a separate statement that it has unanimously approved the arrangement and concluded that it is in the best interests of the company. It said it would pay the USD9.3 million termination fee to end its proposed merger with Transglobe Energy Corp as the Glencore deal represents a superior proposal.
Glencore said the deal is expected to close in the second quarter of 2014 and represents a 61% premium to Caracal's 342 pence closing share price on April 11 and a 54% premium to the 357 pence volume-weighted average price of the shares in the 30 trading days leading up to the announcement.
Caracal had announced its proposed all-share merger with Transglobe Energy in March, a deal that would have created a major Africa-focused oil producer with a combined market capitalisation of roughly USD1.8 billion.
"Both companies have had a successful partnership since 2012. This transaction deepens our relationship, adding further value and expertise to our growing oil business in Africa," Glencore Head of Oil Alex Beard said in a statement. "We believe the combined business will be even better placed to take advantage of the long term opportunities across the African oil sector."
Caracal shares were up 58% to 541.50 pence and Glencore shares were up 1.0% to 314.65 pence, putting it in the top FTSE 100 risers Monday.
By Tom McIvor; [email protected]; @TomMcIvor1
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