Gran Tierra to acquire Petrolifera

Gran Tierra to acquire Petrolifera

Monday, January 17, 2011

Calgary — Gran Tierra Energy Inc. will acquire Petrolifera Petroleum Ltd. in a stock deal valued at $195-million (U.S.), including assumed debt, under a friendly agreement announced by the Calgary-based companies Monday.

Based on Monday's stock price, the offer is worth $1.03 per Petrolifera share – a 29 per cent premium to the market price for the company's stock.

Petrolifera is a mid-sized oil and gas producer focused on South America – in Colombia, Peru and Argentina.

Gran Tierra, which is also active in the region, will issue 19 million of its shares – or about 8 per cent of its outstanding stock – to acquire all of Petrolifera's outstanding shares and warrants.

The offer of 0.1241 of a Gran Tierra share for each Petrolifera share is being supported unanimously by Petrolifera's board of directors.

The transaction will require approval from Petrolifera's shareholders.

©2011 CTVglobemedia Publishing Inc. All rights reserved.

Canadian Stocks Decline After Mortgage Rules News

By Matt Walcoff

Jan. 17 (Bloomberg) -- Canadian stocks fell, led by financial companies, after the federal government took steps to tighten household borrowing.

Toronto-Dominion Bank, the country’s second-largest lender by assets, dropped 0.6 percent after Finance Minister Jim Flaherty said the maximum homeowners can borrow against the value of their homes will be cut to 85 percent from 90 percent. The government also withdrew its insurance for home-equity lines of credit and cut the maximum amortization period for government-insured mortgages to 30 years from 35 years.

Teck Resources Inc., Canada’s largest base-metals and coal producer, decreased 1 percent as the U.S. dollar advanced for the first time in six days. Tim Hortons Inc., Canada’s biggest fast-food chain, declined 0.6 percent after Irene Nattel, an analyst at Royal Bank of Canada, cut her rating on the stock.

The Standard & Poor’s/TSX Composite Index slipped 30.36 points, or 0.2 percent, to 13,434.79 at 9:52 a.m. in Toronto.

The S&P/TSX had regained 79 percent of its losses from its 2007 peak as of Jan. 14 as its bank stocks climbed within 7 percent of their all-time highs. Canadian household debt rose to 148 percent of disposable income in the third quarter of last year, exceeding the U.S. level of 147 percent.

--Editor: David Scanlan