Challenger Energy Group PLC (AIM:CEG, OTCQB:BSHPF) shares charged higher on Thursday after it agreed to an all-share acquisition by Sintana Energy Inc (TSX-V:SEI, OTCQB:SEUSF) valuing the London-listed business at around £45 million (or C$84 million).
It will see Challenger shareholders receive 0.4705 new Sintana shares for each share in the AIM-listed company that they own, meaning together they will own around 25% of the combined group.
The deal terms imply a premium valuation of some 44% above Challenger's closing share price on Wednesday, 8 October.
Robert Bose, Sintana chief executive, highlighted that the deal combines "the promise of the Atlantic margin from Namibia and Angola to Uruguay with a diversified portfolio of development and exploration assets".
It creates a market leader positioned to deliver significant success, he added.
Challenger chair Iain McKendrick, meanwhile, called it a springboard for both sets of shareholders.
"This recommended merger fulfils all the strategic intentions of Challenger, creating an entity with a diversified, very high-graded portfolio," McKendrick added.
In London, Challenger shares were up close to 17% changing hands at 13.44p.