Irish oil company Tullow Oil plc on Friday confirmed that it has made a $500-million bid for South African oil exploration and production company Energy Africa.
Tullow Oil has entered into an exclusivity agreement with Engen and other shareholders who in total hold more than 90% of Energy Africa’s issued share capital.
The Irish company has requested that Energy Africa grant it access to information that is necessary to allow Tullow to complete its final due diligence.
It is currently envisaged that if an offer is made it will be in cash with a share alternative.
Shareholders who hold more than 25% of Energy Africa and who are non-residents of South Africa have indicated that they will accept new Tullow shares in exchange for their Energy Africa shares.
A substantial part of the cash element of the offer consideration will be financed by a new debt facility with the balance financed through new equity.
As the possible acquisition can be classified as a reverse takeover pursuant to the listing rules of the United Kingdom Listing Authority and Irish Stock Exchange, Tullow has requested that the listing of its ordinary shares be suspended temporarily. — I-Net Bridge