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Paramount offers cash for Redcliffe Add to ...

Paramount Resources Ltd. has agreed to buy the remainder of Redcliffe Exploration Inc. , offering other shareholders a 31 per cent premium above Friday's market price.

Paramount has agreed to pay 42 cents cash per class A share of Redcliffe, and assume $12.5-million of debt, in a deal that values the junior oil and gas company at $68.5-million.

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Redcliffe A shares opened trading Monday at 41 cents, up nine cents or 28 per cent from the Friday close.

Redcliffe's board of directors has unanimously recommended that the company's shareholders vote in favour the deal.

The acquisition would allow Paramount to solidify its holdings in the Peace River Arch area and add to its liquids-rich gas prospects.

Paramount already owns about 18 per cent of Redcliffe's class A shares. Paramount's class B shares will also be converted to class A on a 10-for-one basis prior to the shareholders meeting.

The agreement includes 46,000 hectares of undeveloped land that Paramount Resources values at about $30 million. The area is located near its Karr-Gold Creek project.

Paramount expects the acquisition to close around June 25, pending approval from Redcliffe shareholders.

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