Two days after Magnum Gas & Power ended plans to acquire private company Bombora Natural Energy, Perth-based Zeta Petroleum has revealed its own merger plans with the target.
Zeta will acquire the entire issued capital of Bombora on a six-for-11 basis, with about 27.8 million shares to be issued at 11 cents each.
The deal is worth about $3.1 million.
As part of the acquisition, Bombora founder, local petroleum executive John Begg, will become managing director of Zeta while Marie Malaxos, a former chief operating officer at Buru Energy, will also represent Bombora on Zeta’s board as a non-executive director.
Zeta is also planning a $7 million capital raising to fund Bombora’s gas work programs in the Perth Basin and in California.
Zeta shares have been suspended from trade while it awaits confirmation from the ASX that the takeover does not constitute a reverse-takeover and require Zeta to comply with ASX re-listing rules.
The amount of shares Zeta plans to issue to Bombora would give the target just over 50 per cent ownership in Zeta's issued capital.
The deal is expected to be completed by the end of May.
On Wednesday, Magnum announced plans to acquire Bombora had been terminated by mutual agreement.
The acquisition was subject to a number of conditions, which weren’t met by a deadline.
“The company has terminated the SPA, and Bombora has not objected to that termination,” Magnum said on Wednesday.
Zeta shares were worth 7.1 cents each before going into suspension.