LONDON: Sintana Energy Inc. (TSXV: SEI) (OTCQX: SNNAF) and Challenger Energy Group PLC (AIM: CEG) announced Wednesday they have reached an agreement on a recommended all-share offer by which Sintana will acquire the entire issued share capital of Challenger.
The acquisition, valued at approximately £45 million (C$84 million), will be effected through a Court-sanctioned scheme of arrangement under the Isle of Man Companies Act 1931. The combined entity is intended to become a leading oil and gas exploration company focused on high-impact assets along the Atlantic margin.
Under the terms of the deal, Challenger shareholders will receive 0.4705 new Sintana shares for each Challenger share they own. This implies a value of 16.61 pence per Challenger share, a 44% premium to its closing price on Oct. 8, the latest practicable date before the announcement.
Upon completion, Challenger shareholders are expected to own approximately 25% of the combined group’s issued share capital.
The boards of both companies unanimously recommended the transaction, citing the strategic benefits of combining their complementary portfolios. Sintana’s primary assets are in Namibia, including an indirect interest in the significant Mopane discoveries, while Challenger holds key offshore exploration blocks in Uruguay.
“The combination will create an Atlantic-margin focused oil and gas exploration champion,” a joint statement from the companies said. The boards believe the merged company will benefit from a diversified portfolio, combined technical expertise, and increased scale to attract investor interest.
In support of the acquisition, Sintana has received irrevocable undertakings from Challenger shareholders representing approximately 34.20% of its issued ordinary share capital to vote in favor of the scheme.
As part of the transaction, Sintana intends to seek a dual listing for its shares on the AIM market of the London Stock Exchange in the fourth quarter of 2025, in addition to its current listings on the TSXV in Canada and the OTCQX in the United States. This would allow former Challenger shareholders to trade their new Sintana shares on AIM.
The acquisition is subject to approval by Challenger shareholders, Court sanction, and other customary conditions.
Commenting on the Acquisition, Iain McKendrick, Chairman of Challenger, said: This recommended merger fulfils all the strategic intentions of Challenger, creating an entity with a diversified and very high-graded portfolio, and which will be a springboard to further excellent returns for both sets of shareholders.
Commenting on the Acquisition, Robert Bose, Chief Executive Officer and Director of Sintana, said: The combination of Sintana and Challenger delivers on our long-term strategy to create and execute on a portfolio of exposures to high-impact exploration opportunities. Expanding our aperture to capture the promise of the Atlantic margin from Namibia and Angola to Uruguay with a diversified portfolio of development and exploration assets creates a market leader positioned to deliver significant success.