China's Sinopec to buy Alberta's Daylight Energy for $2.2 billion
Chinese state-owned oil company Sinopec (NYSE:SNP)(LSE:SNP) will buy Alberta-based oil and gas company Daylight Energy (TSE:DAY) in an all-cash deal valued at C$2.2 billion, the companies said Tuesday.
Sinopec's C$10.08 per share agreed bid for Daylight represents a 43% premium over Daylight's 60-day average price on the TSX. Daylight's board has unanimously approved the acquisition.
Daylight shares more than doubled Tuesday morning at $9.66 after closing Friday at $4.59, less than half the offer price. Sinopec's US-listed shares were down 1% at $92.30.
In a press release, Daylight's president and CEO, Anthony Lambert, said: "We believe this transaction with SIPC recognizes the highly attractive asset portfolio and exceptional team that we have assembled at Daylight.
"The efforts and accomplishments of this team will be built upon through increased investment in the business and acceleration of our development and exploration opportunities."
Daylight Energy is focused on exploiting resource plays in the Deep Basin of Alberta and north east British Columbia. The company has a balanced mix of crude oil, liquids-rich natural gas resource plays and has the flexibility to focus its capital investments on the commodity that provides the best economics, the company said.
Resource-hungry China has been increasingly busy in Canada. Last year, Sinopec paid $4.65 billion for a 9% stake in oilsands company Syncrude Canada and in July of this year, Cnooc announced the acquisition of Opti Canada for $2.1 billion.
Foreign investment in Canada's resource sector has not been without its drawbacks. In June of this year, PetroChina walked away from a $5.4 billion joint venture with Encana (TSE:ECA)(NYSE:ECA) and late last year, Ottawa blocked BHP Billiton's (NYSE:BHP) $40 billion hostile takeover of Saskatchewan's Potash Corp (TSE:POT)(NYSE:POT).
Related news
- London Mining remains on track to hit 2012 production target at Marampa
- Ceres Power Holdings reports significant improvements of its fuel cell products
- Oxford Catalysts Group shares advance as it announces first start-up of FT reactor
- Mariana Resources kicks off drilling programme at Las Calandrias gold-silver project
- Orogen Gold begins Phase 1 drilling programme at Deli Jovan
- Magnolia Petroleum on track to hit 100 wells target by end-2012
- Mwana Africa sells 15pct stake in Freda Rebecca gold mine for $405k - UPDATE
