Aurora backs Baytex takeover bid

Oil and gas group directors recommend NYSE-listed group's cash offer.

Aurora Oil and Gas (AUT) limited has backed a takeover bid from Canadian oil and gas company Baytex Energy Corp, listed on the New York Stock Exchange and the Toronto Stock Exchange.

In a statement to the Australian Securities Exchange, Aurora said it entered a scheme implementation deed with a price of $4.10 cash per share, implying a market capitalisation of $1.84 billion.

The offer is a 52 per cent premium to $2.69, the average price of Aurora shares in the week to February 6.

The directors recommend Aurora shareholders support the scheme in the absence of a superior proposal.

Aurora executive chairman Jon Stewart said the board believes the group is well positioned with a growth outlook.

"The board has undertaken a thorough assessment of the proposal from Baytex and believes it represents an attractive opportunity for shareholders to realise value at a significant premium to the current share price," Mr Stewart said.

The scheme is subject to customary conditions including shareholder approval and approval from the Australian Foreign Investment Review Board.