(Reuters) - InterOil Corp IOC.N said on Friday an appeals court in Canada had overturned approval of the natural gas producer’s $2.5 billion sale to Exxon Mobil Corp (XOM.N), throwing the deal’s viability in doubt.
The Supreme Court of Yukon ruled for Phil Mulacek, InterOil’s founder and second-largest shareholder, who had objected to the all-stock deal announced in July.
The Supreme Court approved the deal in early October, but Mulacek filed an objection saying it did not properly remunerate InterOil shareholders.
InterOil is incorporated in Yukon, Canada, with operations in Papua New Guinea and headquarters in Singapore.
An InterOil representative said on Friday that Canadian approval was all that remained to close the deal.
Exxon representatives were not immediately available for comment. A representative for Mulacek was not immediately available for comment.
InterOil said it still believed that the Exxon deal represented “compelling value” for its shareholders and was considering options to close the deal.
Shares of InterOil fell 5.8 percent to close at $45.75, and Exxon edged down 0.1 percent to $83.57.
InterOil owns a 36.5 percent stake in Papua New Guinea’s Elk-Antelope gas field, which is operated by Total (TOTF.PA).
The acquisition would give Exxon interests in six licenses in Papua New Guinea covering about four million acres and help the world’s largest publicly traded energy company supply liquefied natural gas (LNG) to Asian markets.
Reporting by Ernest Scheyder; Editing by Richard Chang