Energy juniors Renegade Petroleum, Alexander Energy to join forces
The friendly, $495 million stock-based takeover of Renegade will form a new company named Spartan Energy Corp.
CALGARY – Energy junior Alexander Energy Ltd. is taking over Renegade Petroleum Ltd. in a friendly, $495-million stock-based deal.
The combined company – to be named Spartan Energy Corp. – will be focused on developing light oil in Saskatchewan.
Spartan will be led by Alexander’s current management team and board of directors.
Based on Alexander’s five-day weighted average stock price, the deal is worth $1.55 per share – a 65% premium over Renegade’s trading price over that period.
The transaction follows a tumultuous period for Renegade. Last spring, it kicked off a formal process to weigh its strategic alternatives.
In the following months, some of its top brass parted ways with the company, including its CEO and board chairman in October. Last month, it fended off a challenge from dissident shareholder FrontFour Capital Group LLC.
In a release, Alexander says Spartan would have production of 6,150 barrels of oil equivalent per day, 93% of which would be in valuable liquids.
Renegade shares closed up 30% on the TSX Venture Exchange at $1.30, while Alexander’s dropped more than 8% to 65 cents.
©The Canadian Press