Bonterra Energy announces rival bid for Spartan Oil

Tue Dec 11, 2012 5:43pm GMT

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* Bid could derail Pinecrest Energy's planned takeover

* Bonterra offers about C$441 million

* Unsolicited bid values Spartan at C$4.96 a share

* Spartan shares up 3 pct at C$4.88

TORONTO, Dec 11 (Reuters) - Bonterra Energy Corp said on Tuesday it offered about C$441 million ($447 million) to buy Spartan Oil Corp, a move that could derail Pinecrest Energy Inc's planned takeover of Spartan.

Calgary-based Bonterra said its proposed deal would offer strong strategic value to shareholders of both companies, as the combined company would have one of the premier light-oil assets around the Pembina region in the western Canadian province of Alberta.

Bonterra is offering shareholders in Spartan 0.1169 of a Bonterra share for each Spartan share held. Based on Spartan's closing price on Monday, the unsolicited bid values the company at C$4.96 a share or C$441.4 million.

"While negotiations are ongoing, a binding agreement has not yet been signed. Therefore there can be no assurance that any transaction will result from these discussions," Bonterra said in a statement.

Pinecrest agreed last month to acquire Spartan in a bid to raise its output from reserves in Alberta and Saskatchewan. The bid is currently worth about C$4.44 or C$394.4 million.

Spartan, which on Monday disclosed that it had received an unsolicited bid from an unnamed buyer, has said its board plans to review the unsolicited offer in consultation with its legal, financial and strategic advisers.

Shares in Spartan were up 3 percent at C$4.88 in heavy trading on the Toronto Stock Exchange on Tuesday afternoon. Bonterra share were down 1 Canadian cent at C$42.45.

Bonterra said the proposed deal would give shareholders in Spartan the opportunity to own equity in an established dividend-paying company. Spartan shareholders would own about 35 percent of Bonterra, if the proposed deal succeeds.

Bonterra said the combination of the two companies would create one of the dominant light oil producers in the Pembina area with a strong asset position of low-risk development drilling opportunities.

If the deal goes through, Bonterra has committed to boosting its monthly dividend to 28 Canadian cents a share from 26 Canadian cents a share, beginning in March 2013.

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