Canadian junior Petroamerica has upped its offer for Canadian minnow Suroco in attempt to head off a hostile takeover from Vetra Holding.
Petroamerica shareholders will vote on a proposal next week to increase its offer to C$0.80 per share in cash and stock, below Vetra's latest per-share cash bid of C$0.83 placed earlier this week.
Vetra had initially made an all-cash offer of C$0.60 to answer Petroamerica's initial bid of C$0.573.
Petroamerica's latest offer is even with Suroco's present price Thursday morning in Calgary, down 1.23% from an open of C$0.81.
"There is too much upside value at stake, especially with the upcoming drilling in the PUT-7 block, for shareholders to sell out for cash at this point," said Jeff Boyce, executive chairman of Petroamerica.
Suroco's assets include a 15.8% stake in the Suroriente Block, a 50% interest in the Alea 1848A Block and a 49.5% share of the Alea 1947C Block.
The company also offers probable reserves of 3.1 million barrels and daily production of 2461 barrels of medium oil.
Vetra joins Suroco in three of the four blocks, operating the Surioriente Block, which contains Suroco’s only producing assets.
A range of Canadian independents have carved out a niche operating in Colombia, where the regulatory regime is viewed as favourable and guerilla violence has been trending down over the past decade.
Some consolidation among peers already occurred in the space last year when player Pacific Rubiales acquired fellow independent Petrominerales in a $907 million deal.