ExxonMobil’s acquisition of InterOil hit a speed bump on Friday after a Canadian court revived an objection to the deal.
InterOil said on Monday that the Court of Appeal of Yukon overturned the Supreme Court of Yukon’s approval of the pending transaction after upholding an appeal lodged against the deal.
The appeal was lodged by InterOil’s second largest shareholder and former InterOil CEO Phil Mulacek.
According to Reuters, Mulacek objects to the deal because he believes it does not properly remunerate InterOil shareholders.
The transaction was initially expected to close in September 2016.
InterOil said on Monday that it’s in discussions with ExxonMobil with respect to extending the deal’s outside date.
InterOil added that it’s also considering options to file for leave to appeal to the Supreme Court of Canada.
“Despite this disappointing ruling, we’re pleased that ExxonMobil has advised that they remain fully supportive of the transaction as InterOil works through the issues raised by the Court,” InterOil chairman Chris Finlayson said.
The Supreme Court of Yukon approved the pending all-stock transaction in October after finding the transaction is “fair and reasonable.”
ExxonMobil agreed in July to acquire all of the outstanding shares of InterOil in a transaction is worth more than $2.5 billion.
The agreement was made just five days after Exxon made an unsolicited offer for InterOil, besting a previous offer made by Australia-based Oil Search.
InterOil Corporation is an independent oil and gas business with a sole focus on Papua New Guinea.
InterOil’s assets include one of Asia’s largest undeveloped gas fields, Elk-Antelope, and exploration licenses covering about 6,177 square miles.
Exxon’s offer calls for a payment of $45.00 per share of InterOil, paid in ExxonMobil shares, at closing.
The number of ExxonMobil shares paid per share of InterOil will be calculated based on the volume weighted average price of ExxonMobil shares over a measuring period of 10 days ending shortly before the closing date.
The transaction has been approved by the boards of directors of both companies.