Touchstone to snap up rival Trinity in £24m deal

(Sharecast News) - Shares in Trinity Exploration & Production soared on Wednesday, after it agreed to be taken over by rival Touchstone Exploration.

Under the terms of the recommended all-share offer, Trinity shareholders will receive 1.5 new Touchstone shares for every Trinity share they hold. Both companies are listed on Aim.

The deal is valued at £24.1m, based on Touchstone's closing price of 41.25p on 30 April.

Touchstone called the tie-up a "compelling" opportunity for both companies and shareholders.

Paul Baay, chief executive, said: "We believe this acquisition represents a compelling strategic opportunity which will deliver enhanced scale, balance sheet strength and growth opportunities.

"The business combination will create an upstream oil and gas company of increased sale in Trinidad, enhancing our ability to deliver growth in reserves, production and cash flows."

The deal would also allow the combined group to benefit from greater economy of scale and recurring annual cost synergies, Touchstone added.

Jeremy Bridglalsingh, Trinity chief executive, said: "Our two companies have operated in close proximity over many years. The premium offered demonstrates the value Touchstone sees in Trinity's team and operations and its confidence in the future potential of the enlarged business."

Trinity is one of the largest Trinidad and Tobago-focused independent exploration and production companies, with both onshore and offshore assets. Canada's Touchstone is similarly focused on Trinidad.

As at 1000 BST, shares in Touchstone had eased 3% at 40.12p, while Trinity had soared 50% to 54p.