NEW YORK (The Deal) -- Canada's Crescent Point Energy (CPG) agreed to pay C$1.53 billion ($1.23 billion) in stock and assumed debt for Legacy Oil + Gas, striking a deal four months after the debt-laden target put itself on the block.
Under the terms of the offer, Calgary-based Crescent will offer 0.095 of a share for each share of its cross-town rival, equating to about C$2.85 per share, or about C$560 million, based on Crescent's closing price of C$30 on May 25. Crescent will also assume Legacy's C$967 million of net debt.
The per-share offer is about 2% lower than Legacy's Tuesday closing price of C$2.92. But it is almost 80% more than the target's closing price at the start of April, before activist investor FrontFour Capital Group sought to oust CEO Trent Yanko and rumors emerged of a looming bid.
"Legacy's valuation has come under pressure [due to falling oil prices]," the company said late on Tuesday, May 26. "The company's financial leverage ... also began to erode, putting additional pressure on Legacy's share price." Legacy shares traded as high as C$10 in mid-2014.
In February, Legacy tapped FirstEnergy Capital and GMP Securities to find a buyer for either all of the company or some of its assets.
For Crescent, the purchase will add about 22,000 barrels of oil equivalent a day, or boe/d, to its current production of close to 150,000 boe/d. The new output includes about 15,000 boe/d from Legacy's conventional and unconventional fields in Crescent's core operating regions of southeast Saskatchewan, Manitoba and North Dakota.