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Medco pays Sh51.7bn for Lamu oil explorer

Oil exploration
Oil exploration in northern Kenya. FILE PHOTO | NMG 

Indonesian oil giant Medco Energi has struck a Sh51.7 billion deal to buy London-listed Ophir Energy, which announced sale of its Kenyan oil and gas exploration interests almost three years ago.

The firms said the agreement was for the purchase of all the shares of Ophir Energy in an arrangement expected to be sanctioned by a court of law. Medco is listed on the Jakarta Stock Exchange.

Medco had up to January 28 to make an offer, which was done before the official announcement. Ophir sought to sell its oil exploration investments in Lamu County at Block L9, after writing off a loss of Sh6.3 billion ($62.7 million) it had incurred in the process of searching for hydrocarbons.

“The boards of Medco, Medco Global and Ophir are pleased to announce that they have reached agreement on the terms of a recommended acquisition pursuant to which Medco Global will acquire the entire issued and to be issued ordinary share capital of Ophir,” said the firms.

“It is anticipated that the acquisition will be implemented by way of a court-sanctioned scheme of arrangement.”

Under the agreement, Ophir shareholders will be entitled to receive 55 pence [0.55 of a sterling pound or Sh73] in cash for each Ophir share.

“The acquisition values the entire issued and to be issued share capital of Ophir at approximately £390.6 million [Sh51.7 billion],” the statement said.

The acquisition represents a premium of approximately 65.7 percent to the closing price of 33.20 pence (Sh43.97) per Ophir share on December 28, 2018.

Ophir said that its investment bankers had advised that the transaction value was fair.

“The Ophir directors, who have been so advised by Morgan Stanley and Lambert Energy Advisory as to the financial terms of the acquisition, consider the terms of the acquisition to be fair and reasonable,” the statement said.

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