The all-scrip offer of one Arc share for every six Voyager shares was accepted by Voyager's board and will be put to shareholders as a merger by "scheme of arrangement", the two companies said in a joint statement.
Voyager managing director John Begg and Arc managing director Eric Streitberg, said the merger allowed the companies to realise value by combining two highly complementary portfolios.
The merger would also create a strengthened and highly strategic position in the onshore annd offshore Perth Basin, with participation in an aggressive drilling program and enhanced exploration and production.
The merged organisation would have ownership of or access to all key infrastructure in the Perth Basin, including major pipelines and plants, allowing timely and cost-effective monetisation of new discoveries, Streitberg and Begg said.
Voyager security holders would be exposed to Arc’s producing Perth Basin Hovea and Eremia oil fields, established gas business and a more influential position in the Jingemia oil field, the directors said.
Arc shareholders would be exposed to the strategic offshore Cliff Head development and Voyager's offshore drilling program.
Arc’s greater financial strength would allow an almost continuous drilling program in the next 12 months providing Voyager security holders with enhanced exposure to the upside of the Perth Basin, the directors said.
Arc shareholders, meanwhile, would have exposure to Voyager’s portfolio of prospective offshore Perth Basin acreage and would increase their company’s equity in the prospective TP/15 permit to 45%.
Based on yesterday's closing price for Arc shares of $2 each, the offer of one Arc share for six Voyager shares values the smaller company's shares at about 33c each - 18% higher that the last closing price of 28c.
That would put Voyager's market capitalisation at about $48 million, compared with Arc's value of almost $390 million.
"The merged group is estimated to have a market capitalisation more than 10 times that of Voyager and will continue to be included in the S&P/ASX 200 (index), providing Voyager shareholders with exposure to the significant, cashed-up Australian oil and gas company," the groups said in a joint statement.
Voyager’s board has recommended its shareholders and listed option holders vote for the merger, subject to no superior offer being made for the company’s securities.
Option holders at Voyager would receive one Arc share for every 15 Voyager listed options.
Unlisted options from Voyager would be cancelled and paid out in cash and listed option holders would be required to vote on the terms of the scheme, the directors said.
Voyager security holders will meet in August and the merger completed the following month, depending on shareholder and regulatory approval.
