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Gold/Mining/Energy : Lundin Oil (LOILY, LOILB Sweden)
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To: Timelord who wrote (221)9/1/1997 6:43:00 AM
From: Tomas   of 2742
 
STOCKHOLM, Sept 1 (Reuter) - Swedish group Sands Petroleum AB (SAPEB.ST) and International Petroleum Corp (IRP.TO) (IPC) said on Monday they planned to merge. Last week the two companies said they were discussing a merger. Both companies, which are engaged in international oil and gas exploration and production, are controlled by the Geneva and Vancouver based Lundin family. Trading in the two companies was suspended last Wednesday pending an announcement. Sands shares were last traded at 39.80 crowns and IPC stock at C$6.35. Sands said IPC shareholders could swap their shares for shares in Sands which would launch a new issue of B-series shares.

Adolf Lundin, chairman of both Sands and IPC, said in a statement that combining Sands' cash flow with IPC's exploration areas would give significant potential. The Lundin family, which is Sands and IPC's biggest shareholder, recommended shareholders accept the offer. The Lundins hold 20.40 percent of capital and votes in IPC which has a market capitalisation of about C$288 million. The family owns 31.45 percent of shares and 39.47 percent of votes in Sands that has a market capitalisation of about C$338 million. If the merger goes through, the Lundins will owns 28.26 percent of the share capital and 33.06 percent of votes of the merged company that will be called A.H.Lundin Oil AB. Sands has appointed Enskilda Securities as the financial advisor for the deal. The offer is conditional on 90 percent of shareholders accepting the terms. The offer will close at the latest in early December.

Some industry sources said a merger could be a precursor to a takeover attempt for Canada's Arakis Energy Corp. Sands bought an 8.2 percent stake in Arakis in March this year. Analysts said a merger would make sense as IPC earlier this year signed a deal to explore for oil on a major southern Sudan concession adjacent to one being developed by an international consortium assembled by Arakis that holds an estimated 600 million barrels of oil.
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