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Ithaca agrees to buy rival in £203m deal

Ithaca agrees to buy rival in £203m deal
Oil and gas firm Ithaca Energy said yesterday it had agreed to buy smaller rival Valiant Petroleum for £203million.

Oil and gas firm Ithaca Energy said yesterday it had agreed to buy smaller rival Valiant Petroleum for £203million.

Valiant’s shares jumped by nearly a third after Ithaca said its Aberdeen-based subsidiary, Ithaca Energy UK, would buy the business outright.

Woking-based Valiant has been for sale since September after launching a “strategic review” of the business. It became a producer for the first time in November, when its North Sea Causeway field came on stream.

Founder and former chief executive Peter Buchanan left the company at the end of last year to put together his own bid; it is not known if he plans to improve on Ithaca’s offer.

Ithaca said the Causeway development and Valiant’s other assets would mean its combined portfolio of proved and probable reserves would increase by 35% to 74million barrels of oil equivalent (boe).

It added that if its offer – equal to £4.75 per Valiant share – was approved, it would also more than double its 2013 daily production forecast to up to 16,000boe. It is unclear if the deal would have any implications for Ithaca’s 35 Aberdeen-based employees or Valiant’s 70-strong workforce, which includes four in the Granite City.

Jack Lee, Calgary-based Ithaca’s chairman, said: “The combined assets of the two groups have a strong strategic fit, with the acquisition materially increasing and broadening Ithaca’s producing asset base and reserves portfolio.”

Mr Lee added that Valiant non-executive directors Jannik Lindbaek and Michael Bonte-Friedheim would join the Ithaca board following the deal.

Valiant said its board would recommend Ithaca’s offer to shareholders. Chairman Kevin Lyon added: “The combination with Ithaca will create a leading North Sea oil and gas operator, with a diverse production and reserves asset base from which to pursue new and exciting growth opportunities.”

Ithaca’s move for Valiant comes the year after the Canadian company held talks with its own suitors.

An unnamed company made a takeover bid, believed to be worth £540million, for Ithaca but the deal fell through.

Valiant shares closed up 31% at 455.5p yesterday, while Ithaca’s stock was down 8.8% at 117p.

Meanwhile, Valiant said it had completed drilling the Timon prospect in the northern North Sea but the well was dry.

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