Canadian oil company Baytex Energy has launched a $1.8 billion bid to take over Australian-listed Aurora Oil and Gas.

Baytex has put forward an offer to acquire 100 per cent of Aurora at a price of $4.10 a share, which is a 52 per cent premium on its share price for the week up to February 6.

The offer values the US-focused producer and explorer at $1.84 billion, compared to its market capitalisation of $1.18 billion at the close of trading on Thursday.

Aurora’s board of directors has recommended the offer to shareholders and the company entered into a scheme of implementation deed with Baytex.

The company’s chairman Jon Stewart said the deal was in the best interest of shareholders, given the premium on offer.

“While as a board we believe Aurora is well positioned and are confident in its future growth outlook, the board has undertaken a thorough assessment of the proposal from Baytex and believes it represents an attractive opportunity for shareholders to realise value at a significant premium to the current share price,” he said in a statement.

Aurora is listed on both the Australian and Toronto stock exchanges but is focused on developing and producing oil and gas in Texas’ Eagle Ford Shale.

The deal is subject to approval from Australia’s Foreign Investment Review board and shareholders.

Shares in Aurora have been placed in a trading halt until 1100 AEST and last traded at $2.62.