NGAS to be bought by Magnum Hunter for $25.5 million

(BestGrowthStock) – Gas company NGAS Resources Inc (NGAS.O: ) agreed to be bought by oil and gas explorer Magnum Hunter Resources Corp (MHR.A: ) for $25.5 million in an all-stock deal that will boost Magnum Hunter’s presence in the Appalachian Basin.

NGAS shareholders will get 0.0846 share of Magnum Hunter common stock for each share held, or 55 cents per share –a 41 percent premium to NGAS stock’s Thursday close.

The enterprise value of the deal is about $98 million, NGAS said in a statement.

NGAS had indicated in November that it was evaluating strategic alternatives, including a sale.

The transaction will increase Magnum Hunter’s position in the Appalachian Basin by about 300,000 acres, NGAS said.

Magnum Hunter has secured committed financing from BMO Capital Markets Corp.

Shares of NGAS, which closed at $0.3855 on Thursday on Nasdaq, rose 36 percent in trading before the bell on Monday. They have risen more than six times since November.

(Reporting by Vaishnavi Bala in Bangalore; Editing by Maju Samuel)

NGAS to be bought by Magnum Hunter for $25.5 million