Talisman Energy Shares Surge On Takeover Talks With Repsol

(RTTNews) - Shares of Talisman Energy Inc. (TLM, TLM.TO) are gaining sharply in intra-day trading Friday following reports that Spanish oil giant Repsol S.A. (REPYY.PK) is in talks to buy the Canadian oil and gas company in a deal valued at up to $8 billion.

Senior Repsol executives are in Calgary for talks, and hope to have a deal agreed before Christmas, the Financial Times reported, citing one person involved in the talks.

According to the Financial Times, the price being negotiated is in a range between $6 and $8 per share, which would represent a premium of up to 117% to Talisman's closing share price of C$4.26 on Thursday.

Talisman Energy confirmed Monday that it has been approached by several parties, including Repsol, with regards to various transactions, adding that there was no assurance any deal would be agreed.

Respol, which is seeking to expand beyond Spain, sees Talisman's energy assets in the North America and Asia Pacific as a growth opportunity. The fall in oil prices to five-year lows also makes companies like Talisman more attractive targets. Also, Repsol has sufficient cash to spend on acquisitions. Respol received $5 billion in compensation earlier this year from Argentina's government over the nationalization of YPF SA, in which Repsol held a majority stake.

Repsol was said to have dropped a plan to acquire Talisman in August after concluding due diligence on the company. Talisman said in late July that it was approached by Repsol "with regards to various transactions".

Talisman Energy shares are currently trading on the NYSE at $4.82, up $1.13 or 30.76%. On the TSX, the company's shares are currently trading at C$5.66, up C$1.40 or 32.86%.