Hunt Oil to acquire Newport Petroleum

Hunt Oil Co., Dallas., on Monday said it agreed to acquire Newport Petroleum Corp. of Calgary in a stock purchase valued at $760 million (Can.), including $271 million in debt. The deal gives Hunt Oil a platform to expand its scope of operations in Canada, said Ray L. Hunt, chairman and CEO of Hunt.


Hunt Oil Co., Dallas., on Monday said it agreed to acquire Newport Petroleum Corp. of Calgary in a stock purchase valued at $760 million (Can.), including $271 million in debt. The deal gives Hunt Oil a platform to expand its scope of operations in Canada, said Ray L. Hunt, chairman and CEO of Hunt.

Terms of the agreement call for Hunt Oil to offer $5.50/share in cash for all the issued and outstanding common shares of Newport. The offer represents a 10% premium over Newport's May 12 closing share price of $5.00 on the Toronto Stock Exchange.

"This is the successful conclusion to the process of identifying opportunities to enhance shareholder value," said Uldis Upitis, chairman and CEO of Newport. The cash offer represents "excellent value" for Newport and provides liquidity for all shareholders, Upitis said. The offer has the unanimous support of Newport's board of directors, and Newport's senior officers and directors have agreed to tender their common shares to the Hunt offer.

The deal is set to close when at least two thirds of Newport's common shares are tendered and all necessary regulatory approvals are given. The agreement also provides that Newport will pay Hunt a noncompletion fee of $25 million under certain circumstances.

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