Ejiofor Alike
25 June 2009
Lagos — After weeks of speculations, Swiss-based oil and gas company, Addax Petroleum, has finally concluded a take-over bid with Sinopec International Petroleum Exploration and Production Corporation (SIPC) of China.
Korean National Oil Company (KNOC) had been competing with Sinopec for the take-over of Addax in a bid worth over $8 billion.
Addax yesterday announced $52.80 (Canadian dollar) per share cash offer by Sinopec -indicating that it had sealed the deal with the latter.
A statement made available to THISDAY yesterday said: "Addax Petroleum Corporation announced today that it has entered into a definitive agreement (the "Support Agreement") with Sinopec International Petroleum Exploration and Production Corporation (SIPC) pursuant to which SIPC has agreed, subject to the terms of the support agreement, to make an offer to acquire all of the outstanding common shares of Addax Petroleum by way of a negotiated take-over bid for $52.80 per common share in cash.
"The offer represents a 47 per cent premium to the closing market price of the Addax Petroleum common shares on June 5, 2009, the day prior to Addax Petroleum's public announcement that it was in preliminary discussions with parties regarding a potential transaction."
The support agreement, according to the statement, provides for, among other things, customary provisions relating to support of Addax Petroleum's board of directors, non-solicitation and right to match covenants in favour of SIPC and the payment to SIPC of a termination fee of $300 million if the acquisition is not completed in certain specified circumstances.
The statement however, added that the obligation of SIPC to take up and pay for Addax Petroleum common shares is also subject to the receipt of certain approvals from the Chinese government.
It also said Addax Petroleum's board of directors, after consulting with its financial and legal advisors, has unanimously agreed that the offer is fair to the holders of the company's shares and is in the best interests of the company.
The board has therefore recommended acceptance of the offer by holders of Addax Petroleum common shares.
Commenting on the issue, Addax Petroleum's President and Chief Executive Officer, Jean Claude Gandur, said: "We are pleased that Sinopec has recognised the highly attractive asset portfolio and exceptional team that we have assembled at Addax Petroleum.
The efforts and accomplishments that Addax Petroleum has achieved thus far will be built on through increased investment in the business and acceleration of development and exploration plans. While Addax Petroleum will cease to be a publicly traded company, we look forward to continuing our business in the countries in which we operate for the benefit of all stakeholders."
Formal documentation relating to the take-over bid is expected to be mailed by SIPC by early July 2009, while the offer will be open for acceptance for a period of not less than 35 days.
Addax, which is quoted in both the London and Canadian Stock Exchanges has market capitalisation of $6.1 billion.
Founded in 1994, the company has oil and gas projects in Nigeria, Gabon, Cameroon, and exploration licenses in the Kurdistan region of Iraq.
Sinopec intends to use the acquisition to make an inroad into Nigeria's oil and gas sector, where over 70 per cent of Addax operations are concentrated.
Sinopec already has a participating interest in Oil Mining Licence (OML) 64 operated by the Nigerian National Petroleum Corporation (NNPC) in Delta State.
Addax had earlier acknowledged in a statement that it had held "preliminary discussions" with third parties that had shown interest in transaction with the company.
It said: "Addax Petroleum Corporation has been made aware of press speculation involving the Corporation and the interest in it by third parties with respect to a possible acquisition or business combination.
"In response to that press speculation, Addax Petroleum acknowledges that it has held preliminary discussions with third parties expressing an interest in a potential transaction with the Corporation. While such preliminary discussions are ongoing, no assurance can be given that a transaction will be completed. Addax Petroleum does not intend to make further comment unless or until there is a transaction to announce."
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