Toronto-based energy company now faces uphill restructuring battle
TORONTO—Amid significant investor backlash Pacific Rubiales has announced that Mexican conglomerate Alfa SAB and its partner, Harbour Energy, have pulled their offer to purchase the Canadian energy company.
Alfa would have acquired all shares of Pacific Rubiales in an all-cash deal for $6.50 per share. While the Pacific Rubiales board approved the transaction, the offer created significant shareholder opposition. O’Hara Administration, which controls about 20 per cent of the company led the group of dissident shareholders and attacked the bid as being significantly too low.
A special shareholder meeting and vote on the offer was scheduled for July 28, but has been cancelled accordingly. Pacific Rubiales officials are now forced to redouble their efforts to restructure the company. Low oil prices, high debt and the loss of its rights to extract oil from its namesake, Rubiales Oil Field in Colombia, after 2016 are all immediate concerns.
The company pledged to continue with its plans to reduce operating costs, divest non-core assets, reduce debt, and continue to pursue energy opportunities in Mexico with its preferred joint venture partner, ALFA.