Mexico's Alfa Said to Bid for Pacific E&P in Surprise Comebackby and
Alfa's offer comes after earlier dropping separate bid
O'Hara, Pacific management could end up backing Alfa's offer
Mexican conglomerate Alfa SAB is back in talks to take over Pacific Exploration & Production Corp. with a sweetened bid for the beleaguered Colombian oil producer, according to people with knowledge of the matter. Shares of Pacific jumped.
A strong offer by Alfa could win support from Pacific’s biggest investor, O’Hara Administration Co., and the producer’s management, the people said, asking not to be identified because the deliberations are private. The offer comes as a surprise after Alfa dropped a bid last month, the people said. Pacific surged 42 percent to 2,825 pesos at 9:49 a.m. in Bogota, reducing its decline this year to 23 percent.
Alfa’s proposal includes a loan of about $500 million, as does an existing bid by Pacific management led by co-chairmen Serafino Iacono and Miguel de la Campa, they said. A board meeting to decide on the best offer scheduled for Thursday evening has been canceled.
Alfa, Pacific and O’Hara declined to comment. A decision on the sale and restructuring process of Pacific, which is being led by financial advisory firm Lazard Ltd., could come within the next few days, the people said.
Bogota-based Pacific failed to make bond interest payments in January and this week. It has struggled after a series of deals in recent years ballooned debt before oil prices plunged. Alfa already has about a 19 percent stake in Pacific and is its second-largest shareholder. It withdrew a C$6.50-a-share offer to buy the company last year after O’Hara said the deal was undervalued.
O’Hara opposes the chairmen’s restructuring plan and has hired Colombian lawyer Jaime Granados, who also represents former Colombian president Alvaro Uribe, the people said.