Sintana Energy to Acquire Challenger Energy in All-Share Offer

Challenger Energy (LON: CEG) shares jumped on Thursday, currently up over 21%, after Sintana Energy announced it has reached an agreement with the company on a recommended all-share offer, creating an Atlantic-margin focused oil and gas exploration firm.

The deal values Challenger at approximately £45 million (approximately C$84 million) on a fully diluted basis.

Under the terms of the acquisition, Challenger shareholders will receive 0.4705 new Sintana shares for each Challenger share held. Upon completion, Challenger shareholders are expected to own approximately 25% of the combined group's issued share capital.

The offer represents a premium of 44% to Challenger's closing price on the Latest Practicable Date, and a premium of approximately 97% to the volume weighted average price for the three-month period ended on the Latest Practicable Date.

The boards of both Sintana and Challenger believe the combination will result in a diversified portfolio of high-impact assets across multiple jurisdictions.

It is expected that the combined entity will benefit from complementary technical, operational, and financial strategies and increased scale to attract investor interest.

Independent Challenger Directors have deemed the terms of the acquisition fair and reasonable, with Gneiss providing financial advice.

Sintana intends to pursue a dual listing on AIM in addition to its current listings on the TSXV and OTCQX. This move is aimed at providing Challenger shareholders with increased liquidity and access to trading of the new Sintana shares.

The acquisition is subject to customary conditions, including shareholder approval, court sanction, and regulatory approvals. The deal is expected to close before the end of Q4 2025.

Iain McKendrick, Chairman of Challenger, said, “This recommended merger fulfils all the strategic intentions of Challenger, creating an entity with a diversified and very high-graded portfolio, and which will be a springboard to further excellent returns for both sets of shareholders.”