Mining giants Glencore Xstrata have launched a takeover bid for Canadian oil group Caracal.
The £800million deal would see the Afrcan-focused firm delisted from the London Stock Exchange if it goes ahead.
The move means Caracal has scrapped merger plans with Canadian rivals TransGlobe Energy, with Glencore offering a £5.5million kill fee for the deal.
“The premium all-cash offer from Glencore is strong recognition of the significant value Caracal has created for its shareholders since inception,” said Caracal boss Gary Guidry.
“This transaction and the significant premium it places on our shares is an excellent outcome for our shareholders.
“Glencore has been an important supporter and partner of Caracal in Chad and this is a natural progression in the development of this portfolio.”
Last week Caracal, which has three major production contracts in the African country, secured an extra £150million in potential debt facilities as it looks to develop its projects in the country.
The firms had been partners in one of the oil projects in Chad since 2012, said Glencore oil chief Alex Beard.
“Both companies have had a successful partnership since 2012,” he said.
“This transaction deepens our relationship, adding further value and expertise to our growing oil business in Africa. We believe the combined business will be even better placed to take advantage of the long term opportunities across the African oil sector.”
Glencore’s offer, which will go before shareholders in the next few weeks, will represent a 61% premium on the Calgary-based firm’s stock price.
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