Skip to main content

A driver exits a Repsol SA gas station after refuelling near La Marbella beach in Barcelona in 2013.David Ramos/Bloomberg

A Talisman Energy Inc. shareholder sued to stop the proposed $8.3-billion sale of the Canadian explorer to Repsol SA, saying the price undervalues the company.

Spain's largest energy company agreed last month to pay shareholders of Calgary-based Talisman $8 ($9.33 Canadian) in cash for each share they own, a 60-per-cent premium to the company's 30- day weighted average price as of Dec. 16.

Shareholder James Baqleh sued in New York state Supreme Court in Manhattan Tuesday seeking to stop the acquisition, saying the transaction is "grossly inadequate" and shareholders would be "irreparably damaged" if it's completed, according to court filings.

The Madrid-based company's deal to buy the Canadian producer was the cheapest among the five largest oil and natural gas purchases in North America last year, if you count the $4.7-billion in debt included in the deal. With crude prices close to the lowest since 2009, Repsol avoided a lofty offer as oil plunged.

Talisman's board has "inexplicably chosen to sell itself for a fraction of its net worth" instead of trying to survive a drop in oil prices with "financial prudence" and a possible sale of certain assets, Mr. Baqleh said.

Talisman didn't immediately respond to a phone message left with its investor relations department seeking comment on the suit. Repsol spokesman Kristian Rix declined to comment when contacted by phone.

The case is Baqleh v. Talisman Energy Inc., 650180/2014, New York State Supreme Court, New York County (Manhattan).