Enerplus and Focus to merge

Enerplus Resources Fund and Focus Energy Trust of Canada have agreed to combine their businesses and create an enterprise with a market capitalisation of C$6.6 billion (US$6.6 billion), which will have a more diversified resource base and be better equipped to pursue more mergers and acquisitions, writes Dann Rogers.

The friendly, all-stock deal, worth C$1.38 billion, extends the current consolidation drive in the sector ahead of a new federal tax regime that takes effect at the start of 2011.

Enerplus will pay 0.425 of its units for each Focus unit and Enerplus unitholders will emerge with about 79% of the combined entity.

The trusts said the acquisition price works out to a premium of about 3% to the combined weighted average price of their units on the Toronto Stock Exchange.

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Enerplus and Focus to merge