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Canada: Baytex and Raging Rivers’ US$2.8B merger unattractive: analysts

 |  June 19, 2018


Baytex Energy and Raging River Exploration announced Monday, June 18, that the two Calgary-based oil and gas producers are merging in an all-stock deal. Under the terms of the transaction, Raging River shareholders will receive 1.36 Baytex shares for each share held. With 315 million shares expected to be issued in the process, the deal has an equity value of US$1.6 billion.

The announcement comes more than a year after Raging River disclosed it had retained GMP Securities as an adviser on “potential business alternatives.”

“This combination creates a diversified, well-capitalized oil producer that has an impressive suite of high quality producing assets,” Raging River CEO Neil Roszell said in a release.

“The merger creates a company with world class assets and a strong balance sheet while retaining substantial torque to higher crude oil prices,” Baytex CEO  Edward LaFehr said in a release.

“If you’re a Raging River shareholder, I’m not quite sure you’re enamoured by this transaction, especially the share price reaction,” said financial advisory Raymond James analyst, Jeremy McCrea, adding that the deal worsened Raging River’s balance sheet.

Full Content: Financial Post

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