Exploration company Tullow Oil is to make a $500m offer for Energy Africa, and has already received backing from shareholders representing more than 90% of Energy Africa's share capital.
Tullow will fund the offer partly by new debt and partly by the issue of 130 million new shares at 95p per share to raise £120m. Energy Africa is a South African based company with interests in nine African countries
Tullow has also agreed to acquire 50% of EAGHL, a joint venture between Energy Africa and APIL, for $70m, which will be paid for by the issue of 41.5 million new shares.
Tullow chief executive Aidan Heavey said the deal would create a 'formidable' independent oil and gas company with core areas in West Africa and the UK.
The deal is subject to the approval of shareholders at an EGM on May 27 in London.
Tullow has also reported results for 2003 which show record turnover of £132.4m, driven by increased production in the North Sea and West Africa. Pre-tax profits rose from £22.5m to £26.6m.
Its UK gas sales were up 20%, while turnover from its Cote d'Ivoire oil operations rose from £14.5m in 2002 to £25.1m.
As a result of today's figures, Tullow's takeover of Energy Africa will not be classified as a reverse takeover, and the suspension of trading in its shares is being lifted.
