Petrobank shares (TSX:PBG) were up $1 or eight per cent to $13.20 and PetroBakken shares (TSX:PBN) fell 27 cents or two per cent to $12.11 on the Toronto Stock Exchange.
Under the proposal, announced late Monday, a reorganized Petrobank will keep about $100 million in cash and a heavy oil business that includes patented production technology.
Petrobank shareholders will get stock in a reorganized company by the same name as well as a proportionate share of its 57 per cent stake in PetroBakken, which is focused on conventional light oil in the Bakken and Cardium formations.
Petrobank's shareholders will receive slightly more than one PetroBakken share for each Petrobank share they have at the time of the conversion.
The boards of both companies are supporting the transaction, saying it will result in two more focused businesses, but the reorganizations will require shareholder approvals.
"PetroBakken is anticipated to benefit from the reorganization through an increase to our publicly traded float, which should provide additional liquidity in the market, and the elimination of any share price trading discounts due to the perceived overhang of a control block owned by the parent company," PetroBakken said in its statement.Suggest a correction