Sinopec International Petroleum Exploration and Production Corporation [[SHI]] has formally commenced its $7.22 billion cash takeover bid, excluding debt, for Addax Petroleum Corp. [[AXC.T]] first announced on June 24th of this year.
As the official press release notes, the offer is subject to a number of conditions including valid acceptances by holders of not less than 66 2/3 per cent of Addax Petroleum shares on a fully diluted basis and receipt of certain regulatory approvals, including the government of The People’s Republic of China. Though none of these conditions are expected to be problematic and the offer should close in the third quarter of this year.
Sinopec found Addax Petroleum most desirable for its operations in West Africa and Iraq, specifically the huge Taq Taq field in Iraqi Kurdistan.
The $7.22 billion price tag is a 47% premium to Addax’s closing share price on June 5, the day before the first announcement that it had received a takeover approach.
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