Shares of Santonia Energy (TSX:STE) shot up more than 10 per cent in heavy trading after the Toronto stock exchanged opened, while Tourmaline stock declined slightly.
The stock portion of the offer is 0.03012 of a Tourmaline share for each share of Santonia.
Tourmaline says that the purchase price, worth $1.50 per Santonia share before markets opened, is an 11 per cent premium on Santonia Energy's closing price on March 3 and a 16.6 per cent premium compared to a 20-day weighted average trading price.
In early trading Tuesday, Santonia shares were up 14 cents to $1.45 with 8.5 million traded. Tourmaline shares slipped 66 cents or 1.3 per cent to $49.63, dropping the inferred value of the offer slightly.
The deal also includes the assumption of $28.3 million of debt and $9 million in transaction fees.
Santonia's board has agreed to pay a $7 million break fee if the deal isn't completed under some circumstances, and given Tourmaline the right to match any superior order that emerges.
The purchase has the approval of Santonia's board but requires the approval of two-thirds of all votes cast by shareholders at a special meeting on April 30. Pending this outcome and other approvals, the deal is expected to close on the same day.