UK-BASED IGas Energy will acquire Australia-based Dart Energy through a scrip deal, creating what the companies say will be a market leading onshore UK oil and gas company.

The scheme of arrangement will see Dart shareholders receive just over 0.08 IGas shares for each Dart share they hold, valuing Dart shares at 18.98 cents, and the entire company at $211.5 million, according to a joint announcement.

Dart shareholders would hold roughly 30 per cent of the extended share capital of IGas under the completed arrangement.

The proposal is backed by Soul Pattinson’s New Hope Corporation, which has a 16.3% stake in Dart, along with shareholders with a further 14.2% of Dart’s capital.

The IGas board has also supported the proposal, but the offer was yet to receive the backing of an independent expert at the time of going to press.

A joint statement released by the companies said the merged group would have a UK onshore licence area of over 1 million net acres, including major UK shale basins.

It would also be “complemented by the underlying core cash f lows, cash balances and unused debt capacity, and a work program for 13 licences funded by GDF SUEZ and two funded by Total E&P UK.”

Dart chief executive John McGoldrick said the combination of the two companies would create a market leader with greater depth in terms of its asset base, access to capital and operating capability.

“We believe this transaction is in the best interests of Dart shareholders –both in terms of the immediate premium being achieved, and in terms of the ability to participate in the long-term value creation potential of the UK shale industry, which we consider will be one of the defining energy market stories of this century,” he said.

Dart chairman Robert Neale will join the IGas board at completion of the deal.