Trinity’s takeover by Trinidadian firm pressing on as previous contender decides to step back

After the acquisition of UK’s Trinity Exploration and Production, which has a portfolio of onshore and offshore oil assets located solely in Trinidad and Tobago, by Canada-based Touchstone Exploration was upheaved by a cash offer from a third player, Trinidad-headquartered Lease Operators, the new would-be partners are progressing with fulfilling the conditions for their proposed merger.

Illustration; Source: Trinity Exploration and Production

Despite Trinity’s shareholders initially accepting Touchstone’s merger deal in late June, Lease Operators’ cash offer of 68.05 pence per share proposed a month later made the UK player decide to go another way and take the latter as it was deemed superior to 61.9 pence per share offered by the Canadian firm.

Touchstone said later in August that the terms of its offer were final and it would not be increased, so Trinity and Lease Operators disclosed that an agreement was reached on their merger. The deal was to be effected through a court-sanctioned scheme of arrangement, conditional upon the fulfillment of relevant terms and conditions.

In the latest development of the acquisition story, the UK player shared that all regulatory conditions have been satisfied after Trinidad’s Minister of Energy and Energy Industries confirmed that his consent is not required for the merger to proceed in August and the Trinidad and Tobago Fair Trading Commission granted permission for the acquisition to proceed without conditions in September.

The merger remains subject to other conditions, including the approval of Trinity shareholders at the court meeting and general meeting, and the court’s approval of the scheme at a hearing scheduled for September 25.

Trinity is now seeking the court’s permission to formally withdraw the scheme relating to Touchstone’s initial offer. If this is granted, the withdrawal will take immediate effect and the UK firm will ask the court’s permission to convene the court meeting and the general meeting, followed by publishing the scheme document containing full details of the acquisition. 

The realization of this scenario seems even more likely since the Canadian firm confirmed earlier today that it does not intend to exercise its right to implement the acquisition by way of a takeover offer for the Trinity shares as an alternative to the scheme.

Touchstone says that it asked and received the takeover panel’s permission for the acquisition to lapse upon withdrawal taking effect. Assuming the court approves the withdrawal at the hearing, the acquisition will also lapse with immediate effect.

Paul Baay, President and Chief Executive Officer of Touchstone, commented: “We are disappointed with the outcome of this process, and the fact that UK takeover rules make it possible for our offer not to complete at such a late stage in the process despite having obtained both shareholder and regulatory approvals. We believe our offer represented compelling value for all stakeholders.

“However, Touchstone remains committed to maintaining strict discipline in all corporate activities. We will only pursue investments that align with our strategic and financial goals, ensuring they deliver value to our shareholders. As we continue to advance our operations to tie in the Cascadura-2ST1 and Cascadura-3ST1 wells towards their first production, along with our upcoming fourth-quarter drilling program, we look forward to updating our shareholders on our strategic and operational progress in the coming months.”

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