CALGARY - Sterling Resources Ltd. (TSXV:SLG) was one of the most heavily traded companies in Toronto on Wednesday, with its shares up more than 70 per cent after the Calgary-based energy company received notice of an unsolicited takeover offer.
The shares had been near a 52-week low before Vitol Anker International of the Netherlands announced it plans to offer 85 cents per share cash for all of Sterling's stock.
Sterling stock was up 35.5 cents at 83 cents with more than 13 million traded by mid-afternoon on the TSX Venture Exchange, an affiliate of the Toronto Stock Exchange that primarily lists smaller companies.
Vitol Anker issued an announcement from Rotterdam and Sterling confirmed it received the notification early Wednesday, before markets opened.
The Dutch company, part of The Vitol Group, had provided a US$12-million loan to Sterling in January to enable it to meet its short-term liquidity oblibations.
Since that time, Vitol said, it has held discussions with Sterling's management about its efforts to find longer-term financing.
Victor Anker said its offer "removes the risk to shareholders from Sterling’s near-term and long-term need for significant capital expenditures, which could result in numerous, potentially dilutive and uncertain financings to bring the company’s projects to completion."
"Vitol Anker is prepared to immediately enter into further discussions with the company to provide additional interim financing for the period whilst the offer is outstanding," it said.
The Dutch company said it has also received support for the offer from Sprott Asset Management, a Canadian company that owns nearly 10 per cent of Sterling's shares.
Sterling acknowledged in its statement that its directors had been in discussions with Vitol Anker and advised its shareholders "to take no further action concerning the Vitol offer until they have received further advice from the board."