Written by David McKay | From Mining Mx

Glencore Xstrata underlined its reputation for going into places where its peer group fears to tread after making a £807m ($1.35bn) bid for Caracal Energy, a UK-listed company that drills for oil in Africa’s Republic of Chad.

Shares in Caracal Energy, which will withdraw from a proposed transaction to merge with TransGlobe Energy Corporation, rose 58% to trade at £5.41/share, just below the Glencore Xstrata offer of £5.50/share.

Caracal Energy directors said they were in support of Glencore’s offer which will require a two-thirds vote in favour for the bid to succeed. Gary Guidry, Caracal president and CEO, said the all-cash offer was “… strong recognition of the value Caracal created for its shareholders since inception”.

Said Alex Beard, Glencore’s head of oil in an announcement today: “We believe the combined business will be even better placed to take advantage of the long term opportunities across the African oil sector”.

Caracal has three production sharing agreements with Chad’s government to explore 26,103 square kilometres for oil and gas in the southern part of the country. The two companies had been in partnership since 2012.

Read more at Mining Mx