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LONDON (Alliance News) - Shares in San Leon Energy PLC spiked Monday morning after it said it had notified Midwestern Oil & Gas it is not interested in a reverse takeover.
San Leon shares were up 38% at 34.00 pence each Monday morning.
Its shares have been suspended from trading on AIM since early November 2017 due to press speculation surrounding Midwestern's proposal that San Leon acquires shares in Midwestern Leon Petroleum.
San Leon has rejected the potential merger and its shares are open for trading starting Monday.
The oil and gas explorer said the merger was "not in the best interests" of its shareholders and "does not provide a sufficient balance of added value and certainty of near-term chash flow".
The company also said it has received USD58.6 million in loan note quarterly payments from Midwestern and has settled its EUR11.5 million oustanding liabilities with Avobone NV.
As of last week, San Leon had a cash balance of about USD13.5 million. The company says it is in a "strong financial position".
The company is now progressing with its capital reduction to allow capital returns to shareholders.
Chief Executive Oisin Fanning said: "The company has worked hard with Midwestern over the recent months to see if there was a transaction that would be beneficial to existing San Leon shareholders.
"Whilst the company received an interesting proposal from Midwestern, the board does not feel the structure of the combination (which would have included the Loan Notes being deemed to have been repaid) reflected the true value of the company's portfolio. Accordingly, we have elected to terminate discussions with Midwestern."
He added: "Our financial position is much stronger than when discussions with Midwestern commenced. We are pleased to report that the first three quarterly payments have been received. Consequently, San Leon is now on a solid financial footing with a cash balance of USD13.5 million and all material problems with creditors and litigation are behind us."
