seplat Petroleum Development Company Plc has revealed plans to acquire Eland Oil and Gas Plc for N174.2bn (£382m).

Seplat said this in a notice on Tuesday that the recommended cash acquisition of Eland Oil would be effected by means of a scheme of arrangement under Part 26 of the Companies Act 2006.

The notice stated that both companies had reached agreement on the terms of a recommended cash acquisition of the entire issued and to be issued ordinary share capital of Eland by Seplat.

Seplat said it agreed to buy Eland Oil as it was seeking to become the country’s biggest independent exploration and productioncompany.

The acquisition of Eland, whose main asset is the Oil Mining Lease 40 licence in the Niger Delta, is set to boost Seplat’s production to 64,000 barrels of oil equivalent a day, a jump of as much as 30 per cent from 2019 guidance.

Eland shares surged as much as 28 per cent, a record gain, and traded at 164.8 pence of 9.05 am London time. Seplat didn’t trade.

Seplat said Eland shareholders on the register at the close of business on October 18, 2019 would be entitled to receive and retain the interim dividend of one pence per Eland Share to be paid on October 31.

The agreement read in part, “The Eland directors, who have been so advised by Evercore as to the financial terms of the acquisition, consider the terms of the acquisition to be fair and reasonable.

“In providing its advice to the Eland directors, Evercore has taken into account the commercial assessments of the Eland directors. Evercore is providing independent financial advice to the Eland directors for the purposes of rule 3 of the code.

“Accordingly, the Eland directors unanimously intend to recommend that Eland shareholders vote in favour of the scheme at the court meeting and the resolution at the general meeting.”