Home: TransAtlantic is based in the Canadian oil hub of Calgary
TransAtlantic applies Incremental pressure
Canadian company TransAtlantic Petroleum has urged shareholders of Incremental Petroleum to accept its takeover offer for the company, despite a recommendation by Incremental’s board that they reject the offer.
TransAtlantic is offering A$1.05 cash for each of Incremental´s 79,735,605 outstanding shares in a bid valued at A$84 million (US$59.3 milllion).
TransAtlantic said in a letter to shareholders that Incremental’s decision to oppose the bid was based on its interpretation of an independent report by financial services group KPMG. It said the KPGM report had slashed its valuation of Incremental shares by 35.8% between October and December last year to about A$2.42.
The company also claimed that KPMG’s assumptions of the future value of the share failed to take into account risks associated with Incremental’s gas-producing asset at Selmo and its new gas exploration asset at Edirne, both in Turkey.
It said there was no guarantee that value would be realised from future workovers and sidetracks of existing wells, or from future drilling.
TransAtlantic said the certainty of its offer compared well with what it said were the uncertainties of future value for Incremental shareholders. It also said the KPMG report had warned that Incremental’s share price could fall further if TransAtlantic’s bid fails.