Rockhopper Agrees to Buy Falkland Oil in $87 Million Dealby
Falkland Oil holders get 0.2993 Rockhopper share for each held
Transaction is 11% premium to Falkland's stock price on Monday
Rockhopper will issue Falkland investors 0.2993 of its stock for each of their shares, the Salisbury, England-based company said Tuesday in a statement. That’s an 11 percent premium to Falkland’s closing share price on Monday, it said.
“This transaction enhances Rockhopper’s position in the Falkland Islands, with the largest regional acreage position and most discovered resources, coupled with a strong balance sheet,” Rockhopper Chairman Pierre Jungels said. “By combining Rockhopper and Falkland Oil & Gas, we shall create a more coherent license ownership structure in the North Falkland Basin.”
Falkland Oil & Gas jumped as much as 6.8 percent to 10.25 pence in London trading, and was at 10 pence as of 8:02 a.m. local time. Rockhopper dropped 3.5 percent to 34.5 pence.
The deal requires the approval of Falkland shareholders. Both Chief Executive Officer Tim Bushell and Chairman John Martin will join the board of the combined company as non-executive directors.
Falkland directors will unanimously vote in favor of the deal, Rockhopper said. Their holdings combined with those of other investors mean holders of 9.4 percent of the stock intend to vote for the deal, it said.