Investor disappointed over the scant premium CPG is offeringCrescent Point Energy Corp. and Legacy Oil + Gas Inc. shares tumbled after Crescent Point emerged as the buyer for struggling Legacy in a $563-million deal under which Crescent Point will also assume nearly $1-billion in Legacy’s debt, bringing the total value of the transaction to $1.5-billion. Some investors were said to be disappointed over the scant premium Crescent Point is offering in its all-stock bid for Legacy, which had tried to woo a buyer since February while dealing with the collapse in oil prices. Meanwhile, Crescent Point is taking on the sizable debt. In April, activist investment firm FrontFour Capital Group said it had acquired 6.8 per cent of Legacy’s stock and wanted three board seats as well as improved corporate governance. Crescent Point said on Tuesday it would buy Legacy, known for assets in Saskatchewan and Alberta, for 0.095 of one of its shares for each Legacy share. It will also assume $967-million of debt. With Crescent Point shares falling 5 per cent on Wednesday to $28.35, Legacy fell to $2.68, down 8 per cent on the day. The suitor also sold 21 million shares at $28.50 each for proceeds of $600-million in a bought deal led by Bank of Montreal and Bank of Nova Scotia. Despite Crescent Point shares in the market sinking below the issue price, banking sources said the offering had mostly sold by the end of the day, with the remainder expected to be targeted at retail investors. The suitor also sold 21 million shares at $28.50 each for proceeds of $600-million in a bought deal led by Bank of Montreal and Bank of Nova Scotia. It was not immediately known how this issue was selling. Legacy chief executive officer Trent Yanko told The Globe and Mail that, in the end, it was not solely up to him whether the entire company was sold versus one of its assets. “Well, I’m one member on the board,” he said. “So, the board as a whole evaluated the options and made this decision.” Mr. Yanko said FrontFour, led by Zachary George, came onto the scene as the process to evaluate strategic alternatives was well under way. However, Mr. George chalked the deal up as a win for his firm, saying the holdings were acquired for an average of $2 a share. He said FrontFour was able to “drive change in this instance.” “We are surprised by the board’s apparent unwillingness to deal with its management issues and its poor negotiating skills as evidenced by an approximate 8-per-cent termination fee combined with a right to match,” he said in an e-mail. “We believe that significant interest remains in Legacy’s acreage in S.E. Saskatchewan. This looks like a highly accretive, phenomenal deal for Crescent Point and [its CEO] Scott Saxberg.” With a file from Carrie Tait