10/04/2015 - 13:29

Zeta bids $29m for Pan Pacific

10/04/2015 - 13:29

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Oil and gas company Zeta Petroleum has launched a proposal to acquire full ownership of Sydney-based Pan Pacific Petroleum by buying all the shares it doesn’t already own in the company, in a deal worth $29.4 million.

Oil and gas company Zeta Petroleum has launched a proposal to acquire full ownership of Sydney-based Pan Pacific Petroleum by buying all the shares it doesn’t already own in the company, in a deal worth $29.4 million.

Zeta is offering Pan Pacific shareholders a cash deal of 5 cents for every share they own, representing a 13.9 per cent premium to the company’s 30 volume weighted average price.

Zeta already owns a 16.8 per cent stake in Pan Pacific.

In a letter to Pan Pacific shareholders, GMP Securities (Zeta’s broker) said there were no conditions attached to the deal and cash payments would be received within three trading days from the date the shares are traded.

“Given Pan Pacific’s substantial losses of the financial year ended 30 June 2014 (loss of $29.5 million) and the six months to December 2014 (loss of $19.7 million), and the current uncertain economic and commodity outlook, a cash offer at a premium to market is expected to be attractive to a number of investors,” GMP said in the letter.

In a statement on the ASX, Pan Pacific said its board would meet to consider Zeta’s offer in detail, but shareholders should take no action in response to the offer until the board is able to provide its formal recommendation.

The offer will close on May 27.

Pan Pacific shares were 13.3 per cent higher at 5.1 cents per share at 1:30pm.

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