Pacific Rubiales Acquisition is Dead: ALFA and Harbour Request Termination of Agreement
Pacific Rubiales Energy Corp. (TSX: PRE) (BVC: PREC) today announced that, at the request of ALFA, S.A.B. de C.V and Harbour Energy Ltd. it has terminated the arrangement agreement for a takeover of Pacific Rubiales that was agreed to on May 20, 2015. The purchase price of $6.50 (Canadian Dollars) per share and including the assumption of the Company’s debt was criticized as too low by Venezuela based O’Hara group, that controls roughly 20% of Pacific Rubiales shares.
The Special Meeting of Shareholders scheduled for July 28, 2015, which had been called in order for Shareholders to consider the Arrangement has been cancelled.
The senior note consent solicitations previously announced on Thursday, June 4, 2015 and the amendments to the Company’s senior credit agreements announced on Thursday, June 11, 2015 will not become effective as they were conditional on closing of the Arrangement.
The Company will continue with its plans to reduce operating costs, divest non-core assets, reduce debt, and continue to pursue Mexico energy opportunities with ALFA, even though the merger failed. Alfa wanted to pursue the recently liberalized Mexican petroleum market, and saw Pacific Rubiales as an appropriate vehicle to do so. The two will continue to work together..