agreed Sunday to buy rival
for $170 million in cash.
The deal, which is valued at $330 million including assumption of debt, comes just a week after Dallas-based Wiser saw its debt ratings cut. In cutting its coprorate credit to B-minus from B, Standard & Poor's cited problems with the company's reserve erosion, cost structure and liquidity. The agreement gives Wiser shareholders a 32% premium over Friday's closing price.
Denver-based Forest will pay $10.60 a share in cash and assume $160 million of debt in the deal. Forest said the agreement boosts reserves and production at its Canadian unit, building on its Canadian Plains operations, and expands the Western unit's reserves and output through an increasing Permian Basin position. The deal also adds significant Gulf Coast and Canadian exploration acreage.
"Nine months ago we stated our goal to acquire properties in the Gulf Coast, Canada and the Permian Basin," said Forest CEO Craig Clark. "We have now achieved that goal with superior economics and high quality assets."
On Friday, Forest closed at $24.02 and Wiser finished at $8.02.