Pacific Rubiales Energy Corp. (PREC), the producer that operates Colombia’s largest oil field, rose in Bogota after saying it agreed to buy PetroMagdalena Energy Corp. (PMD)
Pacific Rubiales climbed 0.4 percent to 44,800 pesos at the close of trading, after earlier jumping as much as 2.5 percent in the biggest intraday advance since May 22. The benchmark IGBC index fell 0.2 percent. PetroMagdalena’s Canadian-traded shares jumped 26 percent, the most since 2008, to C$1.58. The offer implies a 28 percent premium to PetroMagdalena’s closing price of C$1.25 yesterday.
The company agreed to buy PetroMagdalena for C$1.60 per common share in cash and plans to finance the approximately C$253 million ($243.7 million) purchase with cash on hand, Pacific Rubiales said in a statement today.
“It’s a pretty good deal for Pacific,” Matthew Portillo, an analyst at Tudor Pickering Holt & Co., said by phone from New York. “They’re buying a lighter oil resource player, where they can use the lighter crude as a diluent for their heavy-oil production.”
Pacific Rubiales said earlier this year that it agreed to receive about 4.4 percent of PetroMagdalena stock as payment for debt owed from an exploration venture. President Jose Francisco Arata said the company would hold onto stock in PetroMagdalena at least through this year in a February interview in Cartagena, Colombia.
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