Emerald Energy +9%; Board In Favor Of Sinochem Takeover Proposal

Shares in U.K. oil and gas explorer Emerald Energy PLC (EEN.LN) rose nearly 9% Wednesday after its board recommended shareholders vote in favor of a takeover proposal by China's Sinochem Corp. (600500.SH), which values Emerald at GBP532.1 million.

At 0730 GMT, shares in Emerald rose 62 pence or 9.2% to 737 pence, more than double the previous 12-month low of around 300 pence seen in October and November.

Under the terms of the deal, shareholders of Isle of Man-based Emerald Energy will be entitled to receive 750 pence in cash for each share, representing a 33.81 pence premium to the closing price on July 10, the last business day prior to an announcement from Emerald that it had received an approach. Emerald didn't reveal at that time that the proposal was from Sinochem, an oil and chemical company.

The Emerald board said it considered the terms of the proposal from Sinochem "to be fair and reasonable" and unanimously recommended shareholders vote in favor.

In a statement summarizing Sinochem's proposal, Emerald said the tie-up offers Sinochem the opportunity to expand its exploration and production in the Middle East and Latin America by enhancing its reserve base in Syria and Colombia. Emerald's Chairman Alastair Beardsall said the offer represents fair value for shareholders, realistically reflecting its business and assets.

Sinochem's President Han Gensheng said the acquisition is another step in building a global energy company. The company's board was unavailable to immediately comment further.

The deal follows a flurry of similar activity in the sector, after Sinopec bought up Addax Petroleum (AXC.T) for $7.2 billion; Heritage Oil (HOIL.LN) agreed to a merger with Turkish oil company Genel Energy; and Centrica PLC (CNA.LN) made a hostile bid for Venture Production PLC (VPC.LN), for which the offer deadline is Wednesday.

Company Web site: www.emeraldenergy.com

-By Elizabeth Adams, Dow Jones Newswires; +44 (0) 20 7842 9386; elizabeth.adams@dowjones.com

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