Cecilie_Arcurs
Gran Tierra (NYSE:GTE) has announced a recommended and final cash and share acquisition of i3 Energy plc, valued at approximately £174.1 million (US$225.4 million), offering a 49% premium to i3 Energy’s closing price on August 16, 2024.
i3 Energy plc has also confirmed that it has received a firm offer from Gran Tierra Energy, Inc. for the entire issued and to be issued share capital of i3 Energy, following recent speculation in the media.
The deal offers 13.92 pence per i3 Energy share. i3 Energy shareholders will receive one New Gran Tierra Share per 207 i3 Energy Shares and 10.43 pence cash per share, plus a 0.2565 pence cash dividend.
Following completion, i3 Energy shareholders will own up to 16.5% of Gran Tierra.
The acquisition aims to create an independent energy company of scale in the Americas, with increased production, reserves, cash flows, and development options across Canada, Colombia, and Ecuador.
The deal will add 250 net-booked drilling locations from i3 Energy’s assets.
Gran Tierra plans to leverage the Combined Group’s financial capacity to expedite the development of i3 Energy’s Canadian and Colombian assets, aiming to deliver substantial long-term returns to shareholders.
Since January 2023, Gran Tierra has purchased approximately 11% of its Gran Tierra Shares outstanding from free cash flow.
Gran Tierra plans to transfer the entire i3 Energy share capital to its subsidiary, Gran Tierra EIH, after the acquisition.
The move will result in the i3 Energy shares being delisted from the TSX and cancelled from trading on the AIM market of the London Stock Exchange. Gran Tierra will also apply to have i3 Energy cease to be a reporting issuer in all Canadian jurisdictions.
i3 Energy and Gran Tierra have both announced full-year 2024 EBITDA guidance, with i3 Energy predicting a range of $50–55 million, while Gran Tierra predicts a range of $335–395 million in its low case, $400–460 million in its base case, and $480–540 million in its high case.
i3 Energy predicts 2024 working interest production of 18,000–19,000 BOEPD from Canadian assets, with exit rate guidance of 20,250–21,250 BOEPD, while Gran Tierra predicts production of 32,000–35,000 BOPD.
Gran Tierra’s strong balance sheet (1.3x net debt to adjusted EBITDA) supports growth and shareholder returns.
