HOUSTON – Stock in Coastal Energy Co. (TSX:CEN) shot up more than 27 per cent Tuesday after the oil and gas developer focused on Thailand and Malaysia announced it was being taken over by a Spanish-based company.
Compania Espanola de Petroleos S.A.U., a subsidiary of the Abu Dhabi-government owned International Petroleum Investment Co., has offered $19 per share in cash for all of the outstanding shares of Coastal Energy.
On the Toronto Stock Exchange, Coastal shares finished trading Tuesday up $4.03 or 27.21 per cent at $18.84 on very heavy volume of almost 28.6 million shares, making it the most active issue on Toronto’s main board.
The proposed transaction has an aggregate value of approximately $2.3 billion, including the assumption of $51 million of net debt, Coastal said in a news release.
The price is a 28 per cent premium to Coastal’s closing price on Monday.
“This transaction delivers significant and immediate value to our shareholders,” Coastal CEO Randy Bartley said in a release announcing the deal.
“Our board of directors is unanimous in its view that this transaction is in the best interests of Coastal Energy Co. and recommends shareholders vote in favour.”
CEPSA chief executive Pedro Miro said the deal reflects “an important step” in increasing CEPSA’s exploration and production capabilities.
“Coastal’s business comprises a high-quality portfolio of upstream assets located in Southeast Asia, operated by talented management and dedicated employees. We believe that Coastal provides a tremendous foundation for furthering our E&P strategy.”
Coastal shareholders are expected to vote on the deal, which includes a termination payment under certain circumstances of US$78 million, at a meeting in early January.
CEPSA, with some 11,000 employees, is an integrated energy company with business interests in Algeria, Brazil, Canada, Colombia, Panama, Peru and Portugal and sells its products all over the world.