PrimeWest makes bid for Cypress Energy

PrimeWest Energy Trust, Calgary, has launched a $790 million (Can.) friendly takeover bid for Cypress Energy Inc., Calgary, a medium-sized oil and gas producer. The offer, worth $14/share in cash, stock, and assumption of $140 million in Cypress debt, is a 33% premium over the recent Cypress closing price.

Feb. 19, 2001

2 min read

By an OGJ Online Correspondent

CALGARY, Feb. 19�PrimeWest Energy Trust, Calgary, has launched a $790 million (Can.) friendly takeover bid for Cypress Energy Inc., Calgary, a medium-sized oil and gas producer.

The offer, worth $14/share in cash, stock, and assumption of $140 million in Cypress debt, is a 33% premium over the recent Cypress closing price.

Cypress produces 14,000 boe/d, mainly in Alberta. The company recently signed a letter of intent to acquire Ranchero Energy Inc. (OGJ Online, Jan. 29, 2001).

The Cypress acquisition would make PrimeWest one of Canada�s largest energy trust operations, with market capitalization of about $1 billion.

PrimeWest CEO Kent MacIntyre said the deal will benefit both PrimeWest unit holders and Cypress shareholders. He said Cypress assets are high quality and exceptionally well-suited to a royalty trust.

The PrimeWest-Cypress deal is the latest in a serious of recent takeovers of mid-sized producers in Canada.

Anadarko Petroleum Corp., Houston, is expected to succeed with a friendly $11.40 (Can.)share offer for Berkley Petroleum Corp., Calgary, topping a $10.50/share bid by Hunt Oil Co. The Hunt offer remains open until Feb. 27 while Hunt considers its options.

Calpine Corp. a California-based power company, recently announced a $1.8 billion takeover of Calgary-based Encal Energy Ltd.

Benson Petroleum Calgary, said Feb.16 it will accept a $94.5 million takeover by Southward Energy Ltd. after rejecting an Southward's initial $81 million bid. The deal includes assumption of $17.5 million in Benson debt.