Ithaca to acquire Valiant Petroleum for £203m

Group Business Correspondent

Saturday 2 March 2013

THE process of consolidation among North Sea players continues with Ithaca Energy set to acquire Valiant Petroleum in a £203 million deal that values founder Peter Buchanan's stake at £15m.

Custom byline text:

Mark Williamson

Aberdeen-based Ithaca announced it has agreed the terms for a cash and shares takeover with the board of Valiant, which Mr Buchanan founded after working in the oil and gas team at Royal Bank of Scotland.

In November Valiant appointed Michael Bonte-Friedheim as acting chief executive to allow Mr Buchanan to focus on a buyout proposal.Kevin Lyon, fomer head of the old central Scotland office of the 3i private equity business, who chairs Valiant, has a holding valued at £380,000 by the proposed deal with Ithaca.Canada-incorporated Ithaca said the proposed acquisition would establish the company as a leading mid cap North Sea oil and gas operator. The company expects to double current forecast 2013 production to 14,000-16,000 barrels oil equivalent daily.In September Valiant put itself self up for sale after suffering exploration reverses and finding the costs of a key development project spiralling.Experts predicted other North Sea focused companies would follow its lead. Some small firms have experienced problems accessing finance to fund work on the acreage they hold. Ian McLelland, analyst at Edison Investment Research, said: "Ithaca's full price offer for Valiant smacks of being a defensive move to fend off unwanted approaches in what remains an extremely active North Sea M&A market."However, he added: "The deal is hardly great news for the long-suffering Valiant shareholders, either, who get no premium to the market price when it launched its strategic review."Shares in Valiant closed at 480p on September 6, when the company announced it had started a strategic review in which the sale of the business would be considered. Ithaca said the proposed takeover valued them at around 475p.Subject to approval of the deal by Valiant shareholders and the relevant court, Ithaca will acquire an extensive portfolio of assets in UK and Norwegian waters.Valiant produced an average 4800 bopd in the six months to June, compared with 8225 bopd in the same period of 2011.Ithaca will also acquire $500m (£332) tax losses to offset against North Sea profits. Two Valiant directors, Jannik Lindbæk and Mr Bonte-Friedheim, will be appointed non-executive directors of Ithaca Energy.Ithaca said Valiant directors, except Mr Buchanan, had irrevocably undertaken to approve the acquisition in respect of their own beneficial holdings. Valiant Shareholders will be entitled to receive 307p in cash and 1.33 Ithaca consideration shares for each Valiant share held. Shares in Valiant Petroleum closed up 31% at 455.5p.

Contextual targeting label:

Finance

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis. If you're a relatively new user then your comments will be reviewed before publication and if we know you well then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules, which are available here.

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.

Ithaca to acquire Valiant Petroleum for £203m

Commenting & Moderation

MOST READ

SPONSORED LINKS

MOST COMMENTED