NEW YORK (The Deal) -- Pacific Rubiales Energy (PEGFF) (PRE:Toronto) Thursday were holding on to Wednesday's 28% gain, which came after the operator of Colombia's largest oil field said it received a C$2.04 billion ($1.7 billion) offer from Mexican conglomerate Alfa SAB de CV (ALFFF) and private equity-backed Harbour Energy.
The bidders pitched their offer at C$6.50 per share, a 35% premium to Toronto-listed Pacific Rubiales' Tuesday closing price of C$4.83. The bid values the target at $6.4 billion including net debt of about $4.7 billion.
"Alfa and Harbour Energy have agreed with the company [Pacific Rubiales] to work toward completion of definitive documentation expeditiously," Pacific Rubiales said. "The contemplated transaction would be subject to a number of conditions and there can be no assurance that any transaction will be completed."
Pacific Rubiales' Toronto-listed shares were up C$0.09, or 1.4%, at C$6.24 on Thursday morning after closing Wednesday at C$6.16, up C$1.33, or 28%.
U.S.-listed shares in Pacific Rubiales were down 1 cent, or 0.2%, at $5.13 on Thursday morning. The stock had closed Wednesday's session up $1.11, or 28%, at $5.14.
Under the terms of the planned offer, Alfa, which already owns 18.95% of Pacific Rubiales, will seek to increase its stake to 50%, leaving Harbour Energy to buy the remaining 50%. Harbour is jointly owned by Asian commodities trader Noble Group and private equity firm EIG Global Energy Partners.
The bid offers a welcome respite for Pacific Rubiales' investors, who had seen the value of their shares slump more than 75% in the six months to the end of April, when rumors of a bid emerged. Pacific Rubiales has suffered from the recent slump in oil prices, though its high levels of debt, much of which was accrued in recent years as it snapped up smaller oil companies, have exacerbated its woes.