Shares in US-focused Aurora Oil & Gas have spiked this morning after its board recommended shareholders accept a $1.84 billion takeover offer from Canadian oil company Baytex Energy.
Baytex has put forward an offer to acquire 100 per cent of Aurora at a price of $4.10 a share, which is a 52 per cent premium on its share price for the week up to February 6.
The offer values the Subiaco-based producer at $1.84 billion, compared with its market capitalisation of $1.18 billion at the close of trading on Thursday.
Aurora's board of directors has recommended the offer to shareholders and the company entered into a scheme of implementation deed with Baytex.
The company's chairman, Jonathan Stewart, said the deal was in the best interest of shareholders, given the premium on offer.
“While as a board we believe Aurora is well positioned and are confident in its future growth outlook, the board has undertaken a thorough assessment of the proposal from Baytex and believes it represents an attractive opportunity for shareholders to realise value at a significant premium to the current share price," Mr Stewart said in a statement.
Aurora is listed on both the Australian and Toronto stock exchanges but is focused on developing and producing oil and gas in the Eagle Ford Shale, in Texas.
The deal is subject to approval from Australia's Foreign Investment Review board and shareholders.
Shares in Aurora soared this morning after emerging from a trading halt, up more than 55 per cent to $4.06 at 8:46am WST.
Credit Suisse and Goldman Sachs have been named as Aurora's financial advisers, while Gilbert + Tobin was legal adviser. Scotia Waterous acted as exclusive financial adviser to Baytex and Scotiabank provided bank financing in connection with the acquisition. Baytex’s legal advisers are Burnet, Duckworth & Palmer LLP in Canada, Paul, Weiss, Rifkind, Wharton & Garrison LLP in the US and Norton Rose Fulbright in Australia and the US.
On the finance side, Scotiabank’s (debt funder to Baytex) legal advisers were Blake, Cassels & Graydon LLP (Canada), King & Wood Mallesons (Australia) and Bracewell & Giuliani LLP (USA), and Scotia Waterous’ legal advisers were McCarthy Tétrault LLP (Canada) and King & Wood Mallesons (Australia).
