Range Resources says it may no longer proceed with a planned $105 million takeover of International Petroleum in the wake of the oil and gas explorer selling its assets in Russia and Kazakhstan.
Range announced in April that it would offer three of its shares for every two International Petroleum shares, subject to due diligence and regulatory approvals, in an all-scrip off-market deal worth around $105 million.
Range has already advanced $US8 million in secured loan financing to International Petroleum but says it will now consider its options in the wake of International Petroleum announcing today that it had signed binding agreements for the $US60 million sale of its assets in Russia and Kazakhstan to an undisclosed Hong Kong-based buyer.
"While these assets have only been marketed for a short period, we have received a binding agreement for a good sale price in difficult markets, which is an extremely pleasing result," International Petroleum chairman Tony Sage said.
"With the binding agreements for the sale of our Kazakhstan and Russian assets now in place, the board will now look to rapidly advance our Niger acreage and proactively re-engage with the board of Range Resources so as to advance the proposed merger of the two companies in a timely fashion, on terms to be renegotiated."
Range claims it was not aware that International Petroleum intended to sell the assets in Kazakhstan and that the terms of the proposed transaction had only now been defined.
"As a result of clarity on the sale of these assets, the likely proceeds from this sale and the associated shift in focus of International Petroleum to its African assets, Range will now identify and consider a range of corporate alternatives to the original merger proposal, which may or may not include a merger of the two companies - albeit on terms to be renegotiated," Range executive director Peter Landau said.
Shares in Range Resources were off 11.4 per cent to 3.1 cents at the close of trade.
