Lukoil to acquire Canadian company Bitech Petroleum

Lukoil Overseas Holding Ltd., a unit of Russian company Lukoil, agreed to acquire Bitech Petroleum Corp., Toronto, for $123 million (Can.). Lukoil will offer $1.55 (Can.)/share in cash for Bitech.

July 17, 2001

2 min read

By the OGJ Online Staff

HOUSTON, July 17 -- Lukoil Overseas Holding Ltd., a unit of Russian company Lukoil, agreed to acquire Bitech Petroleum Corp., Toronto, for $123 million (Can.).

Lukoil will offer $1.55 (Can.)/share in cash for Bitech.

The company said the offer represents a 99% premium over Bitech's closing share price on the Toronto Stock Exchange July 16.

Bitech's directors agreed to recommend the offer to the shareholders, and have committed to tender all of their common shares and options to the offer. Those are worth 3.33% of Bitech's outstanding common shares on a fully diluted basis.

Other shareholders have committed their stakes in the company, worth another 39.16%.

Lukoil Overseas is funding the acquisition through internal cash resources.

The offer will expire 35 days after the offering is mailed.

The deal is contingent on at least two-thirds of Bitech's common shares being tendered plus regulatory approval. Bitech agreed not to solicit or initiate discussions or negotiations with any third party.

Lukoil said Bitech's operations in the Komi Republic represent an important addition to its projects in the Timan-Pechora oil and gas province. Also, Bitech's recent acquisition of Vanguard Oil Corp., which has exploration projects in Egypt, Morocco, Tunisia, and Colombia, will provide Lukoil with "building blocks for future expansion."