Globe/CP say Delphi sees a future in owning Fairmount

Globe/CP say Delphi sees a future in owning Fairmount

2009-08-24 05:04 ET - In the News

Also In the News (C-FMT) Fairmount Energy Inc

The Globe and Mail reports in its Saturday edition that Delphi Energy is buying Fairmount Energy. A Canadian Press dispatch to The Globe reports that Delphi will swap 0.3571 of a common share for each common share of Fairmount.

The deal is worth $14.5-million, including the assumption of $7.3-million of debt and transaction costs of $1.4-million. The friendly bid will be mailed to Fairmount shareholders on Aug. 28 and will expire 35 days later, the Calgary-based oil patch junior said. The deal is backed by the boards of both companies.

Directors and senior executives of Fairmount holding more than 23.4 per cent of the company's shares have agreed to tender their stock to the bid under lockup arrangements. Delphi stock jumped a nickel Friday to close on the Toronto Stock Exchange at $1.05.

Fairmount stock shed half a penny to close on the TSX at 39.5 cents. Schachter Asset Management president Josef Schachter recommended buying Delphi stock in The Globe on Nov. 19 when it could be had for $1.20. Aston Hill Financial vice-president Joanne Hruska was bullish on Delphi in The Globe on Dec. 7, 2007, when it was worth $1.72. Mr. Schachter said buy Delphi in The Globe on June 5, 2007. It was then trading at $1.96.