Geneva-based Vitol said it intends to make an offer to acquire the outstanding common shares of Canada-listed Sterling Resources it does not already own, for 54p per share cash.
The proposed deal would give Vitol control of a UK portfolio amassed over 10 years by Sterling, which has an office in Aberdeen. This includes a stake in the Cladhan discovery east of Shetland.
Vitol announced its plan on the day a man who built one of the biggest independents in the North Sea cleared the last obstacle in the way of his return to the listed sphere.
Bruce Dingwall, former chief executive of Venture Productio,n now heads Trinity group. The Trinidad-focused company's proposed £45m reverse takeover of Bayfield Energy Holdings was approved by shareholders in the listed company yesterday.
Vitol said the planned takeover by its Anker subsidiary would remove the risk to shareholders from Sterling's need to finance significant capital expenditure.
It said: "Vitol and its affiliates provided a (£7.7m) loan to Sterling in early January to enable the company to meet its short-term liquidity obligations. Since that time, Vitol has held discussions with Sterling's management and, based on the company's inability to find an acceptable long-term financing solution, Vitol Anker has decided to pursue an offer for the company."
Vitol has been increasing its investment in oil and gas exploration and production. It is working with Edinburgh-based Bowleven off Cameroon.
Sterling Resources said its board has been in ongoing discussions with Vitol regarding a potential transaction directors believe could be in the best interests of shareholders.
The company has also had discussions with third parties on other potential transactions including business combinations, sales of subsidiaries and assets. The board will consider and evaluate the Vitol offer and continue to review available alternatives. It advised shareholders to take no further action concerning the Vitol offer until they have received further advice from the board.
Analysts say the financial firepower of top trading houses like Vitol is helping them acquire assets and beat smaller competitors through better access to supplies.
"The big trading houses have had such strong results in recent years and they have secured so much cash that they have to make use of it," said Ton Schurink at Geneva-based Commodity Finance Trading Advisory Services.
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