By The Canadian Press

Obsidian Energy formalizes share swap bid for Calgary rival Bonterra Energy

Sep 21, 2020 | 11:37 AM

CALGARY – Obsidian Energy Ltd. is formalizing its hostile takeover bid for rival Bonterra Energy Corp.

It says it will offer two Obsidian shares for each Bonterra share until Jan. 4.

The share-swap offer is the same as the proposal in a declaration of intent made in late August, despite Bonterra shares continuing to trade for more double those of Obsidian.

On Friday, Bonterra stock closed at $1.22 per share, about 2.1 times the value of Obsidian stock at 57 cents.

In a news release, Obsidian says the takeover would create a “Cardium champion” by combining the two companies’ assets in the region, while providing financial strength to add to that base by buying other Cardium lands.

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It says the merged company have production of 35,000 barrels of oil equivalent per day, three times the size of Bonterra in the second quarter.