26 September 2008 07:49 [Source: ICIS news]
SHANGHAI (ICIS news)--China’s Sinopec has offered to buy all the shares of Canadian Tanganyika Oil Co Ltd for C$2.07bn ($2bn) or at C$31.50 a share under a negotiated sale as part of the group’s strategy to expand its overseas operations.
Sinopec unit Sinopec International Petroleum Exploration and Production Corp (SIPC) had agreed to make a cash offer at a substantial premium to the recent and historical trading share prices of Tanganyika, the Toronto-listed firm said late on Thursday.
Sinopec is China’s largest producer and supplier of oil and major petrochemical products while Tanganyika Oil has operations in Syria in the Middle East.
"This transaction is an important component of Sinopec group’s strategy to become a diversified global resource provider," said SIPC president Zhou Baixiu.
"We believe that our strong technical experience and our local relationships will serve to maximise the underlying value of these very attractive assets, and we are excited about this opportunity," Baixiu added.
Sinopec was expected to submit formal documentation of the takeover bid in late October, Tanganyika said, adding that the bid had the full support of its board of directors, which recommended that its shareholders accept the offer.
"If the acquisition is successful, the deal may provide a broad platform for Sinopec’s overseas service," said Yu Fangxing, an analyst from Jianghai Securities.
($1 = C$1.03)Pearl Bantillo contributed to this article
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