United Arab Emirates firm Dana Gas said on Sunday it has agreed to acquire Canada's Centurion Energy International for C$1.15 billion ($1.02 billion) to expand into the upstream gas sector.
Under the deal Dana Gas would acquire "all of Centurion's outstanding common shares for C$12.00 per share, representing an equity value of approximately C$1.15 billion on a fully-diluted basis", the company said in a statement. Centurion shareholders will meet to approve the acquisition in early January 2007, it added.
Calgary-based Centurion, an oil and gas firm operating in Egypt and West Africa, said in October it was in talks with an unnamed firm about a possible transaction, sending its shares up nearly 5 percent. Its shares closed on November 10 at C$11.08.
"We are pleased to offer Centurion shareholders full value for a company that meets perfectly Dana Gas's stated objective of acquiring E&P (exploration and production) operations with production and clearly identified exploration prospects for future growth," Dana Gas said.
It said the offer price represents a premium of 36.4 percent over the trading price of Centurion shares on October 30, the last trading day before Centurion said it received an approach from a third party. It also represents a 55.9 percent premium to Centurion's volume weighted average share price for the 20 trading days up to that date.
Dana Gas was set up to deliver gas to utilities and industrial users in the UAE. With an agreement to import Iranian natural gas delayed, Dana Gas's third-quarter earnings came entirely from investments and financing activity.
Dana Gas shares closed flat at 1.69 dirhams ($0.460) on Sunday ahead of the announcement on Centurion.
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Centurion produces about 32,000 barrels of oil equivalent a day and aims to pump 38,000 by the end of 2006.
Earlier this year, Centurion's stock was under pressure following disappointing drilling results in its Egyptian operations. Investors had been closely watching the fifth of a five-well drilling programme as part of a joint venture with Royal Dutch Shell Plc, analysts have said.
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