NIGERIA – Independent and indigenous Nigerian upstream exploration and production company, Seplat Petroleum Development Company Plc has revealed plans to acquire Eland Oil and Gas Plc for US$481 million (N174.2bn).

Seplat while announcing its imminent acquisition also revealed that the recommended cash acquisition of Eland Oil would be effected by means of a scheme of arrangement under Part 26 of the Companies Act 2006.

The notice from Seplat which carried the announcement stated that both companies had reached agreement on the terms of a recommended cash acquisition of the entire issued and to be issued ordinary share capital of Eland by Seplat.

Seplat said the move to buy Eland Oil was in line with its goal of becoming the country’s biggest independent exploration and production company.

The acquisition of Eland, whose main asset is the Oil Mining Lease 40 licence in the Niger Delta, is set to boost Seplat’s production to 64,000 barrels of oil equivalent a day, which will be an increase of about 30 percent from its current capacity.

The news resulted in a sharp increase of Eland’s prices which jumped to as high as 28 per cent to trade at 168 pence, a record gain in the company’s history.

Seplat revealed Eland shareholders on the register at the close of business on October 18, 2019 would be entitled to receive and retain the interim dividend of one pence per Eland Share to be paid on October 31.

“The Eland directors, who have been so advised by Evercore as to the financial terms of the acquisition, consider the terms of the acquisition to be fair and reasonable,” read the statement in part.

“Accordingly, the Eland directors unanimously intend to recommend that Eland shareholders vote in favour of the scheme at the court meeting and the resolution at the general meeting.”

Eland appointed Evercore to be the lead advisers during the acquisition tasked with the responsibility of providing independent financial advice to the Eland directors for the purposes of rule 3 of the code.