i3 Energy plc has agreed to a £174.1 million (US$225.4m) cash and share bid for its entire share capital from Gran Tierra Energy Inc.
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I3’s portfolio comprises operations in Central Alberta, Clearwater, Elmworth/Wapiti and Simonette in the Western Canadian Sedimentary Basin.
The company also holds 75% of Outer Moray Firth licence P2358, containing the Serenity discovery, with farm-in partner Europa Oil & Gas (Holdings) plc owning 25%.
The licence also contains the Liberator field discovery and the Minos High prospect. In 2022, the partners
Under the sale terms, each i3 shareholder will be entitled to one new Gran Tierra share per every 207 i3 shares held, as well as 10.43 pence cash per i3 share.
Additionally, each i3 shareholder will be entitled to a cash dividend of 0.2565 pence per i3 share in lieu of the ordinary dividend for the three months ending 30 September 2024.
I3 said that, on completion of the acquisition, its shareholders will own up to 16.5% of Gran Tierra.
Gran Tierra intends to transfer the entire issued share capital of i3 to its indirect subsidiary Gran Tierra EIH which holds the purchaser’s Colombian assets.
i3 will cancel its shares from trading on AIM and delist from the TSX.
The company’s directors, holding in aggregate 32,139,532 i3 shares equal to 2.7% of the issued share capital, recommend shareholders approve the sale.
The transaction will be via a court sanctioned scheme, effective during Q4, although Gran Tiera reserves the right to a take over.
Chief executive Majid Shafiq added that the acquisition presented an “exceptional” opportunity for i3’s shareholders.
“The acquisition represents the culmination of a thorough process to realise the maximum value available for shareholders and offers significant upside potential; it expedites the realisation of fair value, with a cash premium and incremental upside through continued ownership in the combined group, without necessitating additional capital investment, time, or operational risk.
“This business combination will significantly enhance scale, thereby improving capacity to drive growth, production, and cash flows for the benefit of all shareholders and local stakeholders.”