Crescent Point Energy Corp (TSX:CPG) stock tumbled Monday after the company announced plans to acquire Hammerhead Energy in a cash and stock deal.
The move will create the seventh-largest exploration and production company in Canada with expected production of more than 200,000 barrels of oil equivalent per day in 2024.
The C$2.55 billion (US$1.86 billion) deal values Hammerhead at C$21 per share. Shares of Hammerhead climbed 1.5% to C$20 on Monday, while Crescent Point stock fell 2.5% during the trading session and another 5.3% after hours to US$7.57.
“We are exceptionally proud of having built a business that has proven to be a top tier asset that has delivered significant organic growth,” Hammerhead CEO Scott Sobie said in a statement.
“A combination of asset quality, exceptional people and a solid business plan has positioned the company to be an attractive acquisition target that will benefit from a lower cost of capital inside of a larger enterprise.”
The deal, which is expected to close in December, still requires the approval of shareholders.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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