Po Val­ley in 3-way M&A deal

The Australian Energy Review - - NEWS - CAMERON DRUM­MOND EUROPE

Asx-listed oil and gas pro­ducer Po Val­ley En­ergy has agreed to sell its North Italy on­shore gas as­sets, in­clud­ing its Selva gas field, to Aim-listed Saf­fron En­ergy. The move is part of a three-way merger and ac­qui­si­tion (M&A) deal with Saf­fron En­ergy and Italy-based Sound En­ergy to cre­ate a large Euro­pean oil and gas busi­ness. Po Val­ley’s Ital­ian as­sets will be sold in an ex­change worth about $21 mil­lion, and the com­pany will re­ceive 200 mil­lion shares in Saf­fron on top of its ex­ist­ing 53.8 per cent stake. Saf­fron shares have been sus­pended since Oc­to­ber last year, af­ter it an­nounced it would ac­quire as­sets from both Po Val­ley and Sound En­ergy, as well as raise $24.3m. Saf­fron will also ac­quire Sound En­ergy for 185.9 mil­lion shares in a re­verse takeover, which will in­crease Po Val­ley’s hold­ing in Saf­fron to 300 mil­lion shares. As part of a broader trans­ac­tion, the com­pany said it planned to even­tu­ally dis­trib­ute those shares to ex­ist­ing share­hold­ers on a pro-rata ba­sis. Po Val­ley share­hold­ers will emerge from the three-way deal with di­rect share­hold­ing in a more strongly cap­i­talised Saf­fron that op­er­ates five nat­u­ral gas pro­duc­tion fields and has plans to broaden op­er­a­tions in both Europe and South East Asia. Po Val­ley chair­man Michael Master­man said the deal would give the com­pany “an ex­panded and con­sol­i­dated Euro­pean and Ital­ian as­set base through the com­bi­na­tion of the Saf­fron, Sound En­ergy, and PVO as­sets, with South East Asia a tar­get for fu­ture project ex­pan­sion”.

Po Val­ley share­hold­ers will gain greater ex­po­sure into the Euro­pean oil and gas sec­tor un­der the deals. Im­age: Saf­fron En­ergy.

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