13th Jul 2015 06:26
LONDON (Alliance News) - Nostrum Oil and Gas PLC Monday said it has is in talks with Tethys Petroleum Ltd about making a CAD73.5 million takeover offer for the Guernsey-registered company.
The FTSE 250-listed oil and gas company said it has made a "possible offer" with a value of CAD0.2185 per Tethys share, which could be paid in cash or in Nostrum shares, or a combination of the two.
Tethys Petroleum is an oil and gas exploration and production company currently focused on Central Asia and the Caspian Region with projects in Kazakhstan, Tajikistan and Georgia.
Tethys has recently been offered financing from AGR Energy Ltd, and Nostrum said its offer represents a 15% premium to the price at which AGR Energy has agreed to subscribe to shares in Tethys. Nostrum's offer also represents a 46% premium compared to the closing price of Tethys shares on the Toronto Stock Exchange on Friday.
The financing talks between Tethys and AGR Energy, if they proceed, would see AGR Energy subscribe to 318.0 million new shares in Tethys at a price of CAD0.192 per share. AGR Energy would also provide Tethys with USD5 million convertible loan.
The subscription by AGR Energy would raise around USD47.7 million.
"Nostrum is seeking a recommendation from the Tethys board regarding its proposal and a decision to proceed with the possible offer from Nostrum in place of the arrangements with AGR Energy," said Nostrum.
Nostrum said the announcement does not indicate the company has a firm intention to make an offer for Tethys and said there is no guarantee a deal will be completed.
By Joshua Warner; [email protected]; @JoshAlliance
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