Stratex Bids to Acquire Magellan Petroleum
Stratex Oil & Gas Holdings, Inc. announced that it has made an offer to acquire Magellan Petroleum for $2.30 per share in cash and stock. The offer was made in a letter to Magellan's CEO with a copy to the Board of Directors yesterday after the CEOs of the two companies had previously discussed Stratex's interest in acquiring Magellan, but had failed to come to any definitive understanding.
At $2.30 per share, the offer provides a 137% premium to Magellan's shareholders based on Friday's closing price of $.97 and is 34% above Magellan's 52-week high of $1.72. The total value of the transaction is approximately $124 million. Stratex is fully committed to pursuing this transaction, and has secured committed financing to complete the cash portion of the offer.
Stratex management believes the value of Magellan's assets has not been realized in the public markets. Stratex management has many years of experience dealing with the financial community and strongly believes that a combination of the two companies will increase access and visibility in the financial markets and unlock substantial value for shareholders of both companies.
Stephen Funk, CEO of Stratex, added: "We are excited about the increased acreage and production plus the growth potential and synergies that could be realized from this accretive transaction. Bringing together the complementary skills and strengths of both management teams would greatly benefit both Magellan and Stratex shareholders. We are confident that the Stratex/Magellan combination will create greater value than the two entities could each achieve separately."
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