Shareholders of TransGlobe Energy have backed the planned sale to Vaalco Energy by 72.8%, just over the required level of 66.66%.
As such, Egypt and Canada-focused TransGlobe will move ahead with its sale. For every TransGlobe share owned, shareholders will receive 0.6727 of a Vaalco share. TransGlobe shareholders will have around 45.5% of the company, while existing Vaalco holders will have 54.5%.
TransGlobe said it expected the Alberta court to approve the arrangement on October 11. Closing therefore would come on October 13.
As of October 14, TransGlobe’s shares would be cancelled on the TSX and London’s AIM.
The sale did encounter opposition. An investor in TransGlobe, Horizon Partners, said the company deserved more and that Vaalco, with its West African focus, was a poor fit.
Horizon called for TransGlobe to sell off its Canadian business and distribute the proceeds to shareholders. It could then continue with a focus on its Egyptian business. Horizon said it had around 20% of support for its alternative plan, in mid-September.
TransGlobe had been due to hold its shareholder vote on September 29 but pushed it back to today in order to secure more participation.
Speaking to Energy Voice last month, TransGlobe CEO and president Randy Neely defended the merger. Neely said the age of small caps was over and that companies needed greater breadth to survive and compete.
Combining with Vaalco, he said, would create a business that “has much lower risk and much higher potential for dividends”.
With just enough voters backing the merger plan, Neely will see in the near future whether his reasoning holds true.