Spain’s Repsol said it will buy Canadian oil and natural gas producer Talisman Energy for $8.3 billion, plus the assumption of $4.7 billion in debt. Paul Whitfield, correspondent for The Deal, notes the significant amount of debt as a risk to Repsol in this acquisition. As oil prices continue their slide since June, with the price of brent being about $59 a barrel and U.S. crude about $54 a barrel, Whitfield explains that Repsol is making an optimistic assumption about oil prices being about $85 a barrel through the terms of the deal. In the short term, Whitfield says the deal is favorable to Talisman shareholders, as the deal is at the top end of what anyone might have expected. He says Repsol could have gotten Talisman for about three to four Canadian dollars a share cheaper if the company had waited.
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