Crescent Point Energy Corp. is buying the FrontFour Capital target Legacy Oil + Gas Inc. for about $563-million in stock.
The deal includes Crescent issuing shares to Legacy and assuming its near $1bn debt load, for a deal worth over $1.5bn. Legacy shareholders get 0.095 shares of Crescent.
The deal values Legacy shares at $2.85 a piece.
Companies with strong balance sheets are moving buy up debt loaded companies. Crescent's hedges has positioned it nicely.
The fall in Legacy's stock price had led to a margin call on its CEO Trent Yanko’s. Recall that FrontFour Capital targeted Legacy last month, seeking board seats and better corporate governance. Shares are up 35% YTD, but still down 65% over the last year.