Canadian Manufacturing

Obsidian Energy proposes merger with Bonterra Energy in share swap deal

The proposed deal would see Bonterra shareholders own about 48% of the combined company

August 31, 2020  The Canadian Press

CALGARY — Obsidian Energy Ltd. is proposing a merger with Bonterra Energy Corp.

The proposed deal would see Bonterra shareholders own about 48% of the combined company.

In a letter to Bonterra chair and chief executive George Fink, Obsidian offered to swap two of its shares for each Bonterra share.

However, Bonterra shares currently trade for more than double the price of Obsidian shares. Bonterra shares closed at $1.50 on the Toronto Stock Exchange on Friday, while Obsidian shares closed at 53 cents.

Advertisment

Obsidian says Bonterra shares currently trade at a premium to its own, but that it does not believe that will be sustained if it remains a stand-alone entity.

It says it will consider an increased exchange ratio if Bonterra is able to demonstrate additional value.


Print this page

Related Stories