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International Petroleum to acquire BlackPearl Resources in deal valued at $1B

Canada's International Petroleum Corp. will acquire fellow producer BlackPearl Resources Inc. in an all-stock deal valued at $1 billion, the companies said Oct. 10.

Both oil and gas producers are based in Canada. While International Petroleum operates globally with a focus on Southeast Asia, BlackPearl operates mostly in Canada.

The holders of common shares of BlackPearl will receive 0.22 common shares of International Petroleum for each BlackPearl share owned. The exchange ratio represents an acquisition price of C$1.85 per BlackPearl share based on a thirty-day volume weighted average price of the International Petroleum shares prior to the date of the agreement. This represents a premium of 42% to the closing price of the BlackPearl shares on Oct. 9, or a premium of 49% to the volume weighted average price of the BlackPearl shares for the last 30 days.

International Petroleum will issue approximately 76 million shares to the holders of BlackPearl shares on a fully diluted basis, resulting in International Petroleum having approximately 164 million of its shares outstanding at completion of the transaction. Entities related to Lundin will remain the largest shareholder of International Petroleum with approximately 24% of the outstanding shares.

The board of directors of both International Petroleum and BlackPearl have unanimously approved the transaction, following the recommendations made by special committees of independent directors of the respective boards.

The transaction is subject to shareholder and other approvals, and the satisfaction or waiver of other customary closing conditions. The transaction is anticipated to close in December.

On completion of the deal, Chris Hogue, current vice president of operations at BlackPearl, will become the senior vice president for Canadian operations at International Petroleum. Ed Sobel, current vice president of exploration at BlackPearl, will become the vice president of exploration at International Petroleum. John Festival, a director and CEO of BlackPearl, will join the International Petroleum board.

Blake, Cassels & Graydon LLP is acting as International Petroleum's Canadian legal advisor and Gernandt & Danielsson Advokatbyrå KB is acting as its Swedish legal advisor.

GMP FirstEnergy is acting as financial advisor to BlackPearl and National Bank Financial and AltaCorp Capital are acting as strategic advisors. Bennett Jones LLP is acting as BlackPearl's legal advisor.