Nigerian oil company Seplat Petroleum is set to acquire London-listed Eland Oil & Gas for £382m.
The West African oil group will pay 166 pence per share for Eland, which translates into a premium of 28.5 per cent from the company’s closing price on Monday.
Shares in Eland jumped by 28 per cent on Tuesday.
The board of Eland – which has its headquarters in Aberdeen, but operates mostly in Nigeria – have backed the deal.
So too has its three largest shareholders.
Seplat chairman Dr. Bryant Orjiako said the acquisition would allow the company to increase the scale of its operations in Nigeria.
He said the new combined entity would have oil production of 38,000 barrels per day and will mostly focus its operations in the West Delta region.
“We firmly believe that Eland is a complementary fit with Seplat and that there will be enhanced scale and a wider range of capabilities made available to the enlarged group through the combination,” Dr Orjiako said.
“This acquisition signals the next step in our journey that will underpin Seplat’s ambition to be the leading independent exploration and production [company] in Nigeria.”
Eland chairman Russell Harvey said: “This offer allows Eland Shareholders to benefit from an accelerated and enhanced realisation of this value through a cash offer at a significant premium to the current market value.
“In addition, the business will benefit from the opportunity to become part of a more significant player in the Nigerian oil and gas market.”
The acquisition will be financed through cash and new loans.
Completion of the deal is expected before the end of the year.
source: City Am