Canadian Superior Energy is set to take over explorer Challenger Energy in a stock deal worth about C$77.8 million ($68.85 million), including debt.

Canadian Superior said it would issue 0.51 share, or C$0.4345, for each Challenger share, which represents a premium of about 36 percent to Challenger's closing price on Thursday.

The deal value includes the assumption of about C$54.4 million in Challenger's net debt, Reuters quoted the company as saying.

The company added the agreement prohibited Challenger from soliciting or initiating any discussion on other business combination or sale of assets.

The agreement, which provides for a mutual C$3 million termination fee, also allows Canadian Superior to match competing, unsolicited proposals for Challenger.

Canadian Superior shares closed at 82 Canadian cents Thursday on the Toronto Stock Exchange, while Challenger's stock closed at 32 Canadian cents on the Toronto Venture Exchange.