Gran Tierra Energy Inc. will acquire Petrolifera Petroleum Ltd. in a stock deal valued at $195-million (U.S.), including assumed debt, under a friendly agreement announced by the Calgary-based companies Monday.
Based on Monday's stock price, the offer is worth $1.03 per Petrolifera share - a 29 per cent premium to the market price for the company's stock.
Petrolifera is a mid-sized oil and gas producer focused on South America - in Colombia, Peru and Argentina.
Gran Tierra, which is also active in the region, will issue 19 million of its shares - or about 8 per cent of its outstanding stock - to acquire all of Petrolifera's outstanding shares and warrants.
The offer of 0.1241 of a Gran Tierra share for each Petrolifera share is being supported unanimously by Petrolifera's board of directors.
The transaction will require approval from Petrolifera's shareholders.