ExxonMobil Canada offers $3.1B to buy Celtic Exploration
The ExxonMobil refinery in Torrance, Calif., is seen Monday, Oct. 8, 2012. (AP / Reed Saxon)
Published Wednesday, October 17, 2012 8:08AM EDT
Last Updated Wednesday, October 17, 2012 9:29AM EDT
CALGARY -- Celtic Exploration Ltd. has received a friendly takeover offer valued at $3.1 billion from Canadian affiliates of U.S. energy giant Exxon Mobil Corp. (NYSE:XOM), which will expand its natural gas holdings in western Canada through the deal.
The Calgary-based company (TSX:CLT) is mainly focused the Montney and Duvernay gas plays.
The total price of the ExxonMobil offer through Exxon Mobil Canada Ltd. includes debt and spending obligations that the buyers would assume.
Celtic's shareholders are being offered $24.50 per share and a half-share of a new company, code-named Spinco -- well above recent market prices.
Celtic's stock closed Tuesday at $18.12 on the Toronto Stock Exchange before the announcement.
The offer, excluding the value of Spinco shares, is 25 per cent over the Oct. 16 closing price and 34 per cent over a 30-day volume-weighted average price of $18.28 per Celtic share.
Spinco will be a new publicly listed oil and gas company led by Celtic's current management team. The new company will have about 49,000 acres of undeveloped lands and produce the equivalent of about 3,300 barrels per day, about 90 per cent in the form of gas.
The board of Celtic unanimously supports the proposal and has agreed not to seek a better offer but is entitled to consider rival offers brought to it. ExxonMobil Canada will have a right to match any superior proposal.
The deal will require approvals from shareholders and debtholders.
Celtic has agreed to pay a $90 million fee in certain circumstances if the deal with ExxonMobil doesn't close.