Talisman Energy Inc. (USA) (NYSE:TLM) Rallies To Match An Offer Price


Dallas, Texas 12/17/2014 (FINANCIALSTRENDS) – Talisman Energy Inc. (USA) (NYSE:TLM)’s Board of Directors approved the buyout offer from a Spanish oil giant Repsol, which proposed a deal valued at $8.3 billion. In addition, Repsol would also take on Canadian company’s $4.7 billion of debt, making the total transaction worth $13 billion. Talisman’s Board also recommended shareholders to vote in favor of the transaction.

As a result, Talisman’s stock rallied 48% to $7.58 a share, close to Repsol’s offer worth $8 per Talisman common share. The transaction is expected to close in mid-2015, subject to the approval of Talisman shareholders and the Canadian courts.

The Advantage

One of the largest deal in privately owned oil and gas companies space would increase Spanish company’s production output by 76% and total reserves by 55%. The combined entity would also be able to pool necessary resources to maximize Talisman Energy Inc. (USA) (NYSE:TLM)’s large undeveloped resource base and will also deliver long-term benefits to Alberta and Canada.

The combined entity would have presence across 50 countries with a staff of more than 27,000 employees. The new entity will result into more competitive and diversified global energy company with average daily production of approximately 680 Mboe and refining capacity of 1 Mboe.

Key Highlights

Hal Kvisle, the new CEO of Talisman Energy Inc. (USA) (NYSE:TLM), was committed to lower the company’s debt and operating costs. However, the continued fall in oil prices since July 2014 undermined best of Kvisle’s efforts. The buyout deal with Repsol brings an end to Kvisle’s struggle and the Talisman’s Board believed that the deal brings optimum value to shareholders relative to any alternative available.

The deal will help Repsol to become one of the top 20 largest global oil companies with combined market value of more than $32 billion. Moreover, Repsol also got the benefit of Talisman’s falling share price, which was 60% lower than in June.

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