Enmax raises bid for Cordero as natural gas climbs

CALGARY, Alberta, May 16 (Reuters) - Enmax Corp, the municipally owned power utility in Calgary, said on Friday it is boosting its offer for junior natural gas producer Cordero Energy Inc COR.TO by 9.2 percent because of rising prices for the fuel.

Enmax is now offering C$4.75 a share for Codero and again extended its bid -- for the third time -- to May 28.

The revised bid values Cordero at about C$176.4 million ($176.4 million), based on 37.14 million outstanding shares. The stock has traded above Enmax's original February offer of C$4.35 a share, for about C$160 million in total, for the past two months as gas prices climbed.

"Just after we put the initial offer out gas prices rose," said Peter Hunt, a spokesman for Enmax. "In light of that the market thought there was a need for a re-evaluation of what Cordero is worth."

Canadian spot natural gas prices have climbed by more than 20 percent, to a recent C$9.45 per gigajoule, since the original bid was made.

The deal was originally expected to close on April 15, but Enmax has extended the offer twice as it failed to win sufficient backing from shareholders.

Enmax is looking to the acquisition to help it guarantee gas supplies for the Calgary Energy Centre, from which it is buying power under a 20-year tolling agreement signed last year.

Hunt said the new offer is final.

Cordero shares rose 4 Canadian cents to C$4.71 on the Toronto Stock Exchange. ($1=$1 Canadian) (Reporting by Scott Haggett)