By the OGJ Online Staff
HOUSTON, June 14 -- El Paso Corp., Houston, has agreed to buy Canadian E&P company Velvet Exploration Ltd. in a $280 million (US) transaction.
In 2000, Velvet produced 8,195 boe/d, based on a 6:1 ratio.
El Paso will offer shareholders $8.15 (Can.)/share in cash and assume debt of $52 million (US).
Velvet's directors have agreed to tender their shares and to recommend that shareholders accept the offer.
At least two-thirds of the shares must be tendered for the offer to be valid. Velvet has agreed to pay a termination fee of $15 million (Can.) under certain circumstances.
Yorkton Securities Inc. and BMO Nesbitt Burns Inc. acted as financial advisors to Velvet; Lehman Brothers advised El Paso.
