Sound Oil announces hostile offer for Antrim Energy

Sound Oil will launch a hostile public offer to acquire all of Canadian-based oil and gas exploration company Antrim Energy via an all-share deal.

The acquisition, if accepted, would give Sound a new exploration asset in Ireland.

According to Sound, the deal would provide both companies with a cash balance of around £23m. The funds would subsequently be used to acquire further assets or corporate acquisitions, whilst reducing costs by closing Antrim's office in Calgary, Canada, and reducing staff numbers.

Sound’s hostile offer would entitle Antrim shareholders to receive 0.3198 Sound shares for each Antrim share held. The offer values Antrim at around £6.4m, and approximately 3.44p per share.

According to Sound, Antrim is now less appealing as a standalone investment proposition and as a partner to oil and gas companies, as the firm’s ongoing costs represent a disproportionate share of its market capitalisation.

"Antrim's market capitalisation has fallen to less than GBP6m, below its net cash as at 30 September," said Sound.

Moreover, Sound said that Antrim is geographically disconnected between its assets and has a reduced capability to execute its work programmes technically and commercially.

Sound released a statement outlining that: "The board of Antrim has not responded to this indicative proposal and appears only prepared to engage in discussions if Sound Oil agrees to restrict its ability to proceed with a public offer.

“The company [Sound] strongly believes that the proposed combination is in the interests of both sets of shareholders," the statement continued.

As of 10:48 on Monday, Sound’s share price dropped 3.16% to 10.41p per share.