Uncertainties remain on Sona’s qualifying acquisition

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KUALA LUMPUR: Sona Petroleum Bhd’s share price dipped further yesterday to a 13-month low of 41.5 sen, despite that the special purpose acquisition company (SPAC) having been granted an approval by the Securities Commission Malaysia on its proposed acquisition of the United Kingdom-listed Salamander Energy plc’s Thailand upstream oil and gas (O&G) assets.

Sona’s share price has been on a decline after shedding 4.6% or two sen to 41.5 sen yesterday, with 32.43 million shares traded. The SC’s approval did not help to clear uncertainties on Sona’s proposed qualifying acquisition simply because Salamander’s board accepted Ophir Energy’s takeover offer last Friday.

According to Salamander’s filing with the London Stock Exchange, the board has recommended shareholders to vote in favour of Ophir’s share swap offer, which has a condition that restrains the latter to dispose of its Thai O&G assets to Sona.

The latest development casts doubt on whether Sona would be able to buy Salamander’s two oil blocks in Thailand.

Sona has made announcements to reaffirm its commitment to complete the acquisition of the Thai assets.

“Sona is confident that proceeding with completion of the [sale and purchase] agreement is in the best interest of its shareholders and it is now the intention of Sona to proceed to post the circular to its shareholders to seek their approval,” Sona said in a statement yesterday.

The SPAC stressed that it remains confident that its offer and valuation are attractive. It is currently seeking further advice on Ophir’s offer and will engage with Salamander before deciding on the next steps. Sona also pointed out that the substantial shareholders support (25.9%) procured by Ophir (from T Rowe Price Associates Inc and T Rowe Price International Ltd) was merely letters of intent, not irrevocable undertakings.

Salamander needs to obtain approval from its general meeting that represents at least 75% of its share value.

To recap, Sona on July 18 entered into a sale and purchase agreement with Salamander on the proposed acquisition of a 40% effective participating interest in the B8/38 concession and the G4/50 concession in Thailand through the purchase of participating equity interests in Salamander Energy (Bualuang Holdings) Ltd for US$281.5 million (RM941.35 million) cash.

 

This article first appeared in The Edge Financial Daily, on November 26, 2014.