Po Valley in 3-way M&A deal
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.