Spain’s Repsol to acquire Talisman Energy

Deal, to close in Q2 2015, is valued at $13 billion.

December 16, 2014   by The Canadian Press

CALGARY — Talisman Energy Inc. says it has agreed to be purchased by Spanish energy giant Repsol in a transaction worth about US$13 billion, including assumed debt.

Under the agreement, Repsol will acquire all outstanding common shares of the Calgary-based company at US$8 each, which values the company’s total equity excluding debt at US$8.3 billion.

The Financial Times had reported Repsol was looking at a bid for Calgary-based Talisman of between $6 and $8 per share.

Also under the deal, Talisman will pay aggregate cash dividends of 18 cents per common share prior to closing. The Talisman board is recommending shareholders accept the deal at a special meeting to be held in mid-February 2015.

Completion of the transaction, which is targeted to close in the second quarter of 2015, is subject to customary closing conditions, including court approval.

Talisman has strong operational capability, a highly skilled work force and we look forward to leveraging their expertise as we partner to create a stronger, more profitable and competitive organization, said Repsol chairman Antonio Brufau.

Repsol is an oil and gas giant with a presence in more than 30 countries, employing more than 24,000 people. The combined company will be among the 15 largest privately-owned oil and gas companies with activity in more than 50 countries and more than 27,000 employees.

Repsol said Talisman’s incorporation will increase Repsol’s output by 76% to 680,000 barrels of oil equivalent per day, and boost reserves by 55%.

According to a Bloomberg report, the Canada Pension Plan Investment Board was also said to be weighing a bid for Talisman.

Analysts have predicted the pace of mergers and acquisition in the oil patch will pick up as low oil prices put pressure on some names, especially those with high debt loads.

Talisman, which over the past few years has been striving to better focus its global portfolio, has long been the subject of takeover speculation.

While its offshore assets in Southeast Asia and its position in several North American shale regions are seen to be attractive to potential bidders, its holdings in the UK North Sea have been cited as a hindrance to any potential deals as they’ve been prone to unplanned outages and have struggled to meet targets.

© 2014 The Canadian Press

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