(Reuters) - Pacific Rubiales Energy Corp PRE.TO said on Wednesday that Mexican industrial conglomerate Alfa SAB de CV (ALFAA.MX) and energy investment firm Harbour Energy Ltd have dropped their plans to buy the Canadian oil and gas company.
The C$2 billion ($1.57 billion) offer, first made in May will terminate immediately, Pacific Rubiales said in a statement, adding that it is not obligated to pay a termination fee.
“The early proxy returns suggested that a significant number of shares would be voted against our proposal,” Harbour Energy Chief Executive Officer Linda Cook said in a joint statement with Alfa.
The offer “correctly valued” Pacific Rubiales, Alfa President Alvaro Fernandez said, adding that as the companies were not willing to raise the offer, they decided to terminate the deal.
Proxy firm Institutional Shareholders Services in June had advised clients to vote “No” on the sale of Pacific Rubiales, saying that the oil producer was worth more than the offer made by Alfa and Harbour.
The deal had been opposed by O‘Hara Administration Co, whose holders own 20 percent of Pacific Rubiales and had launched a proxy fight to block the deal, urging other investors to vote against the offer.
Pacific Rubiales was seeking to disqualify O‘Hara from voting and had said the all-cash offer maximizes value for all of its investors.
The C$6.50 per share offer came during difficult times for Pacific Rubiales, whose shares have plunged 75 percent over the last year as crude prices fell and the company struggled under its hefty debt load.
Pacific Rubiales said it would continue with its plans to reduce costs, divest non-core assets and reduce debt.
Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Diane Craft and Lisa Shumaker