China’s Sinopec International Petroleum Exploration and Production Corp (中國石化國際石油勘探開發) said on Sunday that it has agreed to buy Canadian oil and gas company Daylight Energy Ltd for about C$2.2 billion (US$2.1 billion).
The purchase price amounts to a 43.6 percent premium over the average price of Daylight’s shares over the 60 days that ended on Friday, the company said.
That works out at about C$10.08 per share. Daylight’s shares ended trading on Friday on the Toronto Stock Exchange at C$4.59.
Daylight Energy is based in Calgary, Alberta. It explores for crude oil and natural gas liquids at sites in Alberta and northeast British Columbia.
Sinopec International is a unit of China Petrochemical Corp, which is owned by Sinopec Group (中國石化集團), the largest shareholder of petroleum and petrochemical giant Sinopec Corp — China’s second-largest producer of crude oil.
“We are very pleased to announce this transaction and the considerable value it brings to our securityholders,” Daylight’s president and chief executive Anthony Lambert said.
The transaction must still e approved by Daylight’s shareholders. The company’s board is unanimously backing the sale and its directors and officers have agreed to vote their combined 6.7 million shares in favor of the transaction.
The deal includes a breakup fee of C$100 million.
Because of the proposed sale of the company, Daylight has suspended future dividends. The company said it would pay a previously announced C$0.05 cent dividend on Monday to shareholders of record on Sept. 30.