Pacific Rubiales Said to Get Takeover Offer From Alfa

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Pacific Rubiales Energy Corp., which operates Colombia’s largest oil field, has received a takeover approach from its biggest shareholder, people with knowledge of the matter said.

Alfa SAB and Harbour Energy Ltd. have made an all-cash offer that values Pacific Rubiales at about C$6 a share, the people said, asking not to be identified discussing private information. The bid values Pacific Rubiales at about $6 billion including debt.

Pacific Rubiales rose 18 percent to C$5.50 at the close of trading in Toronto, giving the company a market value of about C$1.74 billion ($1.44 billion). The company has debt of about $4.7 billion, which has ballooned following acquisitions of smaller oil companies as it faces the end of a contract to operate the namesake Rubiales field.

Speculation of Alfa’s interest in a takeover of Pacific Rubiales has been rife ever since the Mexican group disclosed a stake last year. Alfa built its stake to 19 percent in October, just below the 20 percent threshold that would require a company to start a takeover bid in most cases under Canadian securities law.

Still, even at C$6, the bid values Pacific Rubiales’s shares at 75 percent below their 2014 high -- set before crude oil prices began to tumble.

Alfa would consider buying, selling or keeping shares of Pacific Rubiales, Chairman Armando Garza said at a press conference last month. Such a decision “isn’t easy to make,” he said. Alfa has been seeking to expand in the oil industry after Mexico passed a law in 2013 opening its fields to private drillers for the first time since 1938.

Peter Volk, Pacific Rubiales’s general counsel, said he wouldn’t comment on rumors, and a representative for Alfa declined to comment.

Harbour was formed by Asian commodity trader Noble Group Ltd. and private-equity firm EIG Global Energy Partners LLC, to invest in assets energy worldwide. A representative for Noble didn’t immediately respond to a request for comment.

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