Calgary-based Kicking Horse Energy acquired by Polish giant PKN Orlen
PKN to buy Kicking Horse for $293M in all-cash deal
Poland's top refiner, the state-controlled PKN Orlen, said on Tuesday it has launched takeover bids for Canada's Kicking Horse Energy and Nasdaq-listed FX Energy, worth a total of over $300 million US.
PKN has offered Kicking Horse's shareholders $4.75 Cdn for each share in an all-cash deal, valuing the firm's equity at $293 million Cdn, and putting the enterprise value at $356 million Cdn.
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Kicking Horse, an oil and gas explorer, produces around 4,000 barrels of oil equivalent (boe) a day from its Alberta-based unit. Its market value on Canada's TSX Venture Exchange stands at $199 million Cdn.
PKN currently buys most of its oil from neighbouring Russia and these deals would expand its own exploration and production activities.
It already runs one such upstream business in Canada after it bought TriOil Resources in 2013 and has said it wants to seize potential takeovers opportunities as low oil prices force rivals to sell assets.
PKN, which runs a refining and gas-station business in Poland, Lithuania, the Czech Republic and Germany, has not yet produced oil at home.
It has been trying to build a foothold in shale gas but its efforts have so far come to naught.
According to PKN, valued at $7.5 billion US, the takeovers will raise its deposit base by 38 million boe, or 76 per cent, to 88 million boe.
"In line with our strategy in the upstream segment, we're aiming at achieving a production potential of 6 million boe a year in 2017," PKN chief executive Jacek Krawiec said in a statement.
It also offered FX Energy shareholders $1.15 US in cash for each common share and $25 US for each preferred share, valuing the firm's equity at $83 million US. PKN said it will announce a tender offer for FX Energy by Oct. 23.
Besides U.S. producing assets in Montana and Nevada, FX Energy has concessions around Poland, partly co-owned with Poland's state-controlled gas group PGNiG. Its current market value equals $59 million US.
The group plans to de-list both takeover targets and finalise the deals in the first quarter of 2016.