Emerging independent oil and gas company Parkmead Group plc (PMG.L) said Monday that it has agreed to acquire the entire issued and to be issued ordinary share capital of independent oil and gas appraisal and development company Deo Petroleum plc (DEO.L) in deal valued at about £12.7 million.
The acquisition is planned to be implemented by way of a Court sanctioned scheme of arrangement.
Under the terms of the deal, Deo shareholders will be entitled to receive 2 Parkmead consideration shares for each Deo share held at the scheme record time. Based on Parkmead's closing stock price of 14.75 pence on May 25 and about 43.1 million Deo shares in issue as at the date of the announcement, the deal values the entire issued and to be issued share capital of Deo at about £12.7 million, and each Deo share at 29.5 pence.
The consideration of 29.50 pence for each Deo share represents a premium of about 40.5% over the closing price of 21.00 pence per Deo share on May 25, the last practicable date prior to the announcement.
The Deo directors have unanimously recommended Deo shareholders to vote in favor of the scheme and the resolutions at the Court meeting and the General Meeting, or in the event that the acquisition is implemented by means of a takeover offer, to accept or procure acceptance of the takeover offer, as the Deo directors have irrevocably undertaken to do in respect of their entire beneficial holdings in the company, amounting to, in aggregate, about 3.4 million Deo shares, representing about 7.9%t. of the issued ordinary share capital of Deo.
Parkmead has received total irrevocable undertakings and a letter of intent in respect of about 24.3 million DEO shares representing, in aggregate, 56.3% of the existing issued ordinary share capital of Deo. All of the irrevocable undertakings remain binding in all circumstances, including in the event of a higher offer, unless the Scheme lapses or is withdrawn.
Subject to the satisfaction or, where relevant, waiver of all relevant Conditions, the scheme is expected to become effective by August 8.
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