CALGARY — Cordero Energy Inc.has formally accepted a $206-million takeover bid from Ember Resources Inc., ending a battle that saw the junior gas producer pursued by Ember and rival Enmax Corp.

The proposal, valued at $5.50 per share, prevailed after Enmax, owned by the City of Calgary, decided a week ago to bow out of the takeover fight for the junior coal bed methane developer.

Ember and Cordero said Friday they have entered into an agreement that would exchange each Cordero share for 2.683 shares of Ember or $5.50 in cash, up to a maximum of $70-million.

The combination will result in “a highly focused and growth-oriented coalbed methane resource company in a natural gas pricing environment that has seen dramatic improvements over the last three months,” the companies said in a release.

Cordero had struck a deal in February to be acquired by EnMax for $218-million in cash and assumption of debt. The deal included a $7-million non-completion fee to be paid to EnMax if the transaction failed.

EnMax is a diversified electricity distributor serving Calgary and surrounding markets. The company had a profit of nearly $142-million in 2007.

Ember entered the bidding for Cordero with a rival bid in late May and eventually won Cordero's backing for the offer after EnMax failed to complete its earlier takeover by last week's deadline.

The Cordero-Ember arrangement, which carries a mutual break fee of $3.5-million, has been unanimously endorsed by the Cordero board and requires the approval of Cordero shareholders at a meeting to be held by Sept. 8.

Insiders owning 9.9 per cent of Cordero have undertaken to accept the Ember transaction, and Ember has commitments from other shareholders representing 26.5 per cent of the company.

A significant part of those holdings have been committed to the share exchange, meaning other Cordero shareholders will be able to receive at last 40 per cent of their consideration in cash.

Ember is funding the takeover from existing credit facilities and a $55-million stock issue at $2.05 per share.

The takeover affirmed Friday comes as natural gas prices have been rising, making junior companies more valuable and consolidation more likely in the natural gas sector.

Ember, which generated revenues of only $13.3-million last year, is a coal-bed methane developer that operates in Alberta. Cordero, with 2007 revenues of $55.8-million, operates coal bed methane and oil businesses in west-central Alberta.

In Friday trading on the Toronto Stock Exchange, Cordero shares rose 17 cents to $4.84, a gain of more than 3.6 per cent. Ember stock rose three cents to $1.74.