Centurion Energy International Inc, a Canadian natural gas producer with major operations in Egypt, has struck a friendly cash and debt deal to be acquired by Dana Gas PJSC of the United Arab Emirates for about C$1.25 billion (US$1.1 billion).
The two firms signed an agreement in Cairo on Sunday under which the Canadian-headquartered and stock traded company will be bought by a wholly owned subsidiary of Dana Gas for C$12 in cash per share, or a total of C$1.15 billion (US$1 billion) in cash.
Dana will also assume about C$99 million (US$87 million) in Centurion debt.
Centurion Energy chairman and chief executive Said Arrata said the sale to a bigger energy operator delivers value to the Calgary company's shareholders and opportunities for employees.
"We look forward to this unique opportunity with Dana Gas, a pioneer in the Middle East gas industry," Arrata said. "Together, the two companies, will provide the region with a strong indigenous private-sector player to develop the natural gas resources of the wider Middle East."
For Dana Gas, the transaction gives the natural gas pipeline, processing and marketing firm access to Centurion's growing gas production and exploration in Egypt, Tunisia and off the coast of Nigeria.
Hamid Dhiya Jafar, executive chairman of Dana Gas, said the two companies "share a common vision for the importance of the regional gas sector."
"The complementary operations, strategy and approach to business makes Centurion particularly valuable to Dana Gas," Jafar said.
"Centurion is an excellent company with outstanding people who have a proven track record in oil and gas activity in Egypt. We are pleased to offer Centurion shareholders full value for a company that meets perfectly Dana Gas's stated objective of acquiring ... operations with production and clearly identified exploration prospects for future growth," Jafar said.
The friendly cash bid represents a premium of 36.4 percent to Centurion's share price on Oct. 30, the last trading day before the gas producer announced it was in talks on a possible corporate transaction.
The deal, endorsed by a special board committee set up by Centurion, is scheduled to close in early January.
The agreement also provides for a break fee of C$34.75 million payable to Dana if Centurion accepts a higher rival bid and also gives Dana the right to match any superior proposal.
Dana Gas was established last year and is the first regional private sector natural gas company in the Persian Gulf region. Headquartered in Sharjah in the United Arab Emirates, Dana trades on the Abu Dhabi stock exchange and has a stock value of about US$2.7 billion.
Centurion is one of several Calgary-headquartered international energy companies with a focus on the Middle East and other parts of the world.
Last year, another former Calgary energy company, PetroKazakhstan, with significant oil operations in Asia, was sold to China National Petroleum Corp (