CIC Energy
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CIC Energy Corp. is developing the Mmamabula Energy Complex at its Mmamabula Coal Field in southeastern Botswana, Africa. This planned Complex comprises three projects. The most advanced project is the power station and integrated coal mine project, known as the Mmamabula Energy Project. In addition, a Coal-to-Hydrocarbons Project (CTH) and Export Coal project are planned.
CIC Energy to be acquired by Bombay-listed JSW Energy in $422m deal
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CIC Energy Corp (TSX:ELC, BSE:CIC Energy) said Tuesday it has agreed to a takeover by JSW Energy, a power company listed on the Bombay Stock Exchange, in a deal that values CIC at C$422 million.
The C$7.42 per share offer represents a 159% premium to the closing price of CIC on September 14, 2010, the day prior to the announcement of potential takeover offers for the company. The bid is also a 43% premium to CIC’s closing price on Monday, but the company was still trading below the offer price at $6.85 as of 12:13pm EST on Tuesday.
CIC, with around C$27 million of available cash, is currently working on advancing the Mmamabula Energy Complex at the Mmamabula coal field in Botswana, Africa, which consists of the Mmamabula Energy Project, the Mookane Domestic Power Project, the Export Coal Project and a potential Coal-to-Hydrocarbons Project.
JSW Energy, as the independent power arm of the $10bn-market cap JSW Group, delivers power solutions in the states of Karnataka, Maharashtra, Rajasthan, and Himachal Pradesh in India. The company, which is looking to become a full-service integrated energy provider, has an operational capacity of 1,430 MW and is targeting an aggregate generation capacity of 12,070 MW by 2015-16.
“We believe that the terms of this offer provide fair value for CIC Energy shareholders in the current environment,” said chairman and CEO Warren Newfield.
“With South Africa’s increasingly apparent shift in energy policy, the outlook for coal-based power producers looking to supply South Africa has weakened.”
Both JSW and CIC’s boards have approved the transaction, and directors and officers of CIC have already expressed their intention to enter lock-up agreements with JSW to tender their shares to the offer.
CIC Energy has also agreed to pay JSW a break fee of approximately CDN$10.5 million if the offer is not completed.
The deal, which is subject to regulatory and shareholder approvals as well as the renewal of prospecting licenses, is expected to close in late February next year.
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