The takeover bid is aimed at establishing a clear path to full ownership of Osum
Canadian oil and gas private equity firm Waterous Energy Fund (WEF) intends to launch a take-over bid to increase its stake in Canada-based oil sands producer, Osum Oil Sands to 85%.
As per the terms of the offer, Osum shareholders will receive $2.40 cash per share for each share tendered, implying a total transaction value of C$126m ($95.6m).
Subject to signing of the deal, WEF will acquire a maximum of 52,500,000 of Osum’s outstanding common shares, representing approximately 40% of the outstanding common shares of Osum, establishing a clear path to full ownership of Osum.
WEF currently owns approximately 45% stake in Osum
WEF, which currently owns approximately 45% stake in Osum, will own a minimum of approximately 73% and a maximum of approximately 85% stake in Osum, if the offer is successful.
Waterous Energy Fund CEO Adam Waterous said: “The proposed transaction provides immediate liquidity and certainty of value to Osum shareholders after 15 years without any dividends or prospects of accessing the public markets.
“The $2.40 per share offer price represents the same price that WEF paid this past summer when we acquired our initial 45% interest in Osum from three highly sophisticated global financial institutions.
“Osum shareholders should have confidence that fair market value for their shares has been established.”
Moreover, WEF intends to purchase the remainder of the common shares Osum in about three months, if the takeover offer succeeds.
The offer, which is expected to remain open until 24 February 2021, will be subject to certain conditions, including the receipt of necessary regulatory approvals, minimum tender condition, no occurrence of a material adverse effect, and other customary conditions.
Osum Oil Sands is focused on the application of in situ recovery technologies within oil sands and carbonates in the North American country.
Earlier this year, Waterous Energy Fund announced the combination of two of its portfolio companies Cona Resources and Strath Resources to form Strathcona Resources.