Egyptian buyout firm Citadel Capital Company has bought Canadian-listed oil company Rally Energy for C$898 million (€620 million, $850 million) as an add-on acquisition to its portfolio company National Petroleum Corporation.
Citadel will acquire the company’s shares at C$7.30 per share. The price represents a 15 percent premium over the closing price of Rally shares on the Toronto Stock Exchange on August 1.
Rally has primary operations in Egypt, through the Issaran Oilfield, a heavy oil development opportunity. In Pakistan, Rally has a 30 percent stake in the Safed Koh Block, where it is targeting natural gas.
UBS Securities has maintained its $9 share price target for the company arguing it is reasonably likely another bidder may attempt to buy the company, according to Canadian newspaper Globe and Mail. However, Rally’s chief executive said the offer valued the shares higher than they had even been priced.
Karim Sadek, managing director of Citadel Capital and the National Petroleum Corporation, said the deal would provide National Petroleum Corporation with its first exposure outside of Egypt through Rally’s Pakistani assets.
The National Petroleum Corporation is based in the Gulf of Suez and its assets are exploratory. Citadel has $3 billion under management in sectors including oil and gas, mining, cement, and fertilisers.
The oil and gas sector has been a growing area of activity for private equity this year. Only this week, The Riverside Company sold oil and gas robotics company Welltec Holdings to US buyout firm Summit Partners for an undisclosed sum.