Tullow makes $500m bid for South African oil firm

Irish exploration company Tullow Oil have confirmed that it is considering making a $500m (€412.6m) offer for South African oil company Energy Africa.

There was intense market speculation after the suspension of its shares on the Irish and London stock exchanges. The company has already signed agreements with shareholders representing 90% of Energy Africa's share capital. This allows Tullow an exclusive period of negotiations.

The company has said a substantial part of the offer will be in cash with the balance in new shares.

The company said in a statement to the Irish Stock Exchange: "It is currently envisaged that if an offer is made it will be in cash with a share alternative. Shareholders who hold over 25% of Energy Africa and who are non-residents of South Africa have indicated that they would accept new Tullow shares in exchange for their Energy Africa shares. A substantial part of the cash element of the offer consideration would be financed by a new debt facility with the balance through new equity."