Caracal Energy Agrees To Be Bought By Glencore Xstrata; Shares Surge

(RTTNews) - Shares of Caracal Energy Inc. (CRCL.L, CCAXF.PK) surged around 59 percent in London trading after the Canadian oil and gas company said it has reached a definitive agreement to be acquired by Swiss commodities trader and miner Glencore Xstrata Plc (GLCNF.PK, GLNCY.PK, GLEN.L) for an all cash consideration of 5.50 pounds per share by way of Plan of Arrangement.

Stating that the unsolicited proposal from Glencore constitutes a superior proposal, Caracal terminated a prior agreement under which it proposed to merge with Calgary-based TransGlobe Energy Corp. (TGA, TGL.TO). Caracal has paid to TransGlobe a termination fee of $9.25 million as required under the terms.

Caracal expects to close its deal with Glencore in the second quarter of 2014.

Caracal said the new offer represents a 61 percent premium to the 3.42 pounds closing price of Caracal's common shares on April 11, the last trading day prior to the announcement of the Arrangement.

From Glencore's perspective, the acquisition would allow it to take on operatorship and a larger working interest to more fully benefit from the development of Caracal's Chad oil development and exploration operations.

Caracal's Board of Directors has unanimously approved the deal with Glencore and has concluded that it is in the best interests of Caracal.

In London, Caracal shares are currently trading at 543 pence, up 201 pence or 58.77 percent.

Glencore shares are 314.90 pence, up 3.30 pence or 1.06 percent.