A Talisman Energy Inc (TLM) shareholder sued to stop the proposed $8.3 billion sale of the Canadian explorer to Repsol SA (REP), saying the price undervalues the company.
Spain’s largest energy company agreed last month to pay shareholders of Calgary-based Talisman $8 (C$9.87) in cash for each share they own, a 60% premium to the company’s 30-day weighted average price as of December 16.
Shareholder James Baqleh sued January 20 in New York state Supreme Court in Manhattan seeking to stop the acquisition, saying the transaction is “grossly inadequate” and investors would be “irreparably damaged” if it’s completed, according to court filings.
The Madrid-based company’s deal to buy the Canadian producer was the cheapest among the five largest oil and natural gas purchases in North America last year, if the $4.7 billion of debt included in the deal is counted.
With crude prices close to the lowest since 2009, Repsol avoided a lofty offer as oil plunged.
Talisman’s board has “inexplicably chosen to sell itself for a fraction of its net worth” instead of trying to survive a drop in oil prices with “financial prudence” and a possible sale of certain assets, Baqleh said.
“We believe the lawsuit is without merit,” Brent Anderson, a spokesman for Talisman, said in an e-mailed statement.
“We continue to respect and welcome the opinions of all our shareholders.”
Anderson said the company wouldn’t comment further since the matter is before the court.
Kristian Rix, a Repsol spokesman, declined to comment when contacted.
The case is Baqleh v. Talisman Energy Inc., 650180/2014, New York State Supreme Court, New York County (Manhattan).
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