The board of Central Asia-focused Tethys Petroleum has decided not to follow up an offer to buy the business from Nostrum Oil & Gas.
In a statement made to the London Stock Exchange early Tuesday, Tethys said it had resolved not to pursue or engage in discussions with Nostrum following Nostrum's offer on July 13 to buy Tethys' stock at a price of CAD 0.2185 ($0.17) per Tethys share. The offer would have valued Tethys at $57.2 million (based on the 336.7 million shares that have so far been issued by the company).
Instead, Tethys said its board believes the company's current strategic collaboration with AGR Energy that includes a $47.7 million financing represents "a transformational deal for Tethys". Tethys also pointed out that it is currently in a period of exclusivity with AGR Energy that is active until the closing of the AGR financing and share placing is complete.
In a separate statement Tuesday, Tethys said that in relation to the $47.7 million financing with AGR it has agreed with Pope Asset Management (its largest shareholder) that Pope will subscribe for 100 million new shares on the same terms as the AGR placing.
Tethys Executive Chairman John Bell commented in a company statement:
"We are delighted to have the full support of our largest shareholder, Pope Asset Management and to have secured a substantial commitment from them to participate in the proposed placing alongside AGR Energy. Today's news is a further endorsement from our shareholders of their confidence in the company's strategy, team and strategic partnership with AGR Energy."
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