Repsol to acquire Talisman Energy in all-cash transaction

Talisman Energy Inc. and Repsol SA

Talisman Energy Inc. (TSX: TLM)(NYSE: TLM) has entered into a definitive agreement with Repsol SA, under which Repsol will acquire all of the outstanding common shares of Talisman for US$8.00 (C$9.33) per share in cash.

The purchase price for the common shares represents a 75% premium to the seven-day volume weighted average share price and a 60% premium to the 30-day volume weighted average price. Total transaction value is US$13 billion, including Talisman's current debt. In addition, under the transaction, Talisman will be allowed to pay aggregate cash dividends of US$0.18 per common share prior to closing, including the dividend declared and payable on Dec. 31.

The deal will transform Repsol into one of the largest energy groups worldwide, increasing its presence in Organization for Economic Co-operation and Development (OECD) countries and reinforcing its upstream business, which has become the company’s growth engine.

Talisman will contribute producing and exploration assets in North America (Canada and the US) and Southeast Asia (Indonesia, Malaysia, and Vietnam), as well as in Colombia and Norway, among others.

The acquisition will enable Repsol to increase its output 76% to 680,000 barrels of oil equivalent per day and to boost reserves by 55% to more than 2.3 billion barrels of oil equivalent.

Canada and the US currently make up 10% of Repsol production, and the resulting company will allocate 30% of its capital employed to the region, totaling US$15 billion.

The acquisition has been unanimously approved and recommended by the boards of directors of Talisman Energy and Repsol, and is expected to be completed in the second quarter of 2015. The transaction will be completed with a plan of arrangement, and is subject to the approval of the Canadian courts and Talisman shareholders.

Goldman Sachs Canada Inc. and Nomura Securities International Inc. are acting as co-financial advisors to Talisman. Norton Rose Fulbright Canada LLP is acting as Canadian legal advisor to Talisman. Wachtell, Lipton, Rosen & Katz is acting as US legal advisor to Talisman. The legal advisor to the Talisman board is Blake, Cassels & Graydon LLP.


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