CALGARY – Waterous Energy Fund Management Corp. ("WEF Manager"), managing various limited partnerships including Waterous Energy Fund III series, has agreed to purchase a substantial stake in Greenfire Resources Ltd. ("Greenfire") (TSX and NYSE: GFR). The transaction involves acquiring 29,988,854 common shares, approximately 43.3% of Greenfire's issued and outstanding shares, from several key shareholders.
The shares are being bought from Allard Services Limited, Annapurna Limited, and Modro Holdings LLC, entities controlled by Greenfire directors Julian McIntyre and Venkat Siva, and Modro respectively. The acquisition price is set at CAD$10.932 per share, totaling around CAD$327.78 million. This private agreement, subject to customary closing conditions and regulatory approvals, is expected to significantly alter WEF's influence in Greenfire, as they currently do not own any shares in the company.
Upon completion, WEF will become a major shareholder, which may lead to changes in their ownership based on market conditions, Greenfire's performance, and other factors. Both McIntyre and Siva have agreed to resign from Greenfire's board following the transaction.
The deal is structured to comply with an exempt take-over bid, involving fewer than five sellers located outside Canada, and the offer was not made generally to Greenfire's shareholders. The purchase price is within 115% of the market price as per the rules set out in National Instrument 62-104.
An early warning report regarding this acquisition will be filed and made available on Greenfire's SEDAR+ profile. This strategic move by WEF underscores the dynamic nature of ownership in the energy sector.
This news article is based on a press release statement.
InvestingPro Insights
As Waterous Energy Fund Management Corp. positions itself to acquire a significant portion of Greenfire Resources Ltd., recent data from InvestingPro provides a snapshot of the company's financial health and market performance. Greenfire, with a market capitalization of $443.57 million, has experienced a notable price increase of 25.98% over the last six months, suggesting a bullish sentiment among investors. This is further underlined by a year-to-date price total return of 31.69%, despite a 1-year price total return showing a decline of 38.76%. These figures reflect the volatility and potential growth opportunities within the energy sector.
On the operational front, Greenfire's gross profit margin stands at a healthy 29.57% for the last twelve months as of Q2 2024. However, the company's revenue growth has slightly decreased by 0.05% during the same period, which may raise questions about its short-term revenue trajectory. The company's ability to cover short-term obligations is also a point of concern as highlighted by one of the InvestingPro Tips, which points out that Greenfire's short-term obligations exceed its liquid assets.
Another InvestingPro Tip suggests that despite not being profitable over the last twelve months, analysts predict that Greenfire will turn a profit this year. This optimism is a potential indicator of Greenfire's strategic direction and operational efficiency improvements. It's also worth noting that Greenfire does not pay a dividend, aligning with a growth-focused reinvestment strategy rather than immediate returns to shareholders.
Investors and analysts can find additional insights and tips on Greenfire by accessing the full suite of InvestingPro tools, which includes more than 4 additional tips to help inform investment decisions. For a deeper dive into Greenfire's financials and performance metrics, visit https://www.investing.com/pro/GFR.
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