Shares of Cona Resources Ltd. (TSX: CONA), the Canadian crude oil production and development company known as Northern Blizzard Resources until a name change last July, is a top performing TSX-listed stock on Wednesday following an offer to take the Calgary-based company private.
A consortium made up of Waterous Energy Fund and its affiliates said they would pay $2.55 per common share of Cona, marking a 31% premium to the 20-day VWAP (volume weighted average price) of $1.94 through Tuesday’s trading.
Waterous Energy Fund is a Calgary headquartered oil and gas private equity firm founded by Adam Waterous targeting a focused portfolio of owned and controlled investment opportunities between $200-$400 million across North America.
Independent entities, including a committee of independent board members and CIBC World Markets, have cumulatively deemed the offer fair from a financial perspective. The Cona board has approved the letter agreement related to the takeover offer, with certain conditions, including a subsequent definitive agreement to be negotiated in the coming weeks.
Waterous Energy and affiliates already owned about two-thirds of Cona after acquiring about 67.74 million shares of the company at $3.60 per share from two separate entities (Riverstone Holdings, LLC, and NGP Energy Capital Management, LLC) last May, for a total investment of $244 million.
Shares of CONA have been on the slide ever since, including a new 52-week low at $1.78 on February 2. The stock price popped on the news, although coming up short of the buyout proposal, opening the day at $2.43, climbing up to $2.48 (the highest for the stock since August 15, 2017) and dipping as low as $2.24 before coming right back to the opening price with about 30 minutes left in the trading session.