TMCnet News
TUSK Energy Corporation Enters Into Arrangement Agreement for Cash Consideration of CDN$2.15 per Share(Marketwire Canada (English) Via Acquire Media NewsEdge) CALGARY, ALBERTA--(Marketwire - Feb. 10, 2009) - TUSK Energy Corporation ("TUSK") (TSX:TSK) is pleased to announce that it has entered into an arrangement agreement (the "Arrangement Agreement") with Polar Star Canadian Oil and Gas, Inc. ("Polar"), a venture indirectly owned by the Teachers Insurance and Annuity Association of America ("TIAA"). Under the terms of the Arrangement Agreement, Polar will acquire all of the issued and outstanding common shares of TUSK for cash consideration of CDN$2.15 per TUSK share, by way of a plan of arrangement under the Business Corporations Act (Alberta) (the "Arrangement"). The cash consideration of CDN$2.15 per TUSK share under the Arrangement Agreement represents a 165% premium to the weighted average trading price of the TUSK shares for the 20 trading days ending February 9, 2009 and a 150% premium over the closing price of the TUSK shares on February 9, 2009 of CDN$0.86. Including the assumption of indebtedness, the aggregate value of the transaction is approximately CDN$257 million. The Board of Directors of TUSK (the "TUSK Board") unanimously approved the Arrangement and unanimously recommends that shareholders vote in favour of the transaction. All of the members of the TUSK Board and TUSK's executive officers, who collectively own approximately 7.7% of the outstanding TUSK shares, have entered into lock-up agreements with Polar in respect of the proposed transaction and have confirmed their intention to vote their TUSK shares in favour of the Arrangement. Macquarie Capital Markets Canada Ltd. and Scotia Waterous Inc., TUSK's financial advisors, have each provided the TUSK Board with their respective verbal opinions that, as of the date hereof, the consideration to be received by TUSK's shareholders pursuant to the proposed Arrangement is fair, from a financial point of view. Peters & Co. Limited acted as financial advisor to Polar with respect to the acquisition of TUSK. The Arrangement is subject to a number of conditions including, but not limited to, the approval of: (a) at least 66 2/3% of the votes cast in person or by proxy at a special meeting of TUSK's shareholders, and (b) a majority of the votes cast by minority shareholders, as well as court and regulatory approvals (including pursuant to the Investment Canada Act) and other customary conditions. An information circular regarding the Arrangement is expected to be mailed to TUSK shareholders in late February for a meeting expected to be held in late March, with completion of the Arrangement shortly thereafter. Under the Arrangement Agreement, TUSK has agreed that it will not solicit or initiate any discussions concerning the pursuit of any other acquisition proposals. TUSK has also agreed to pay a termination fee in an amount equal to CDN$7.7 million to Polar in certain circumstances. In addition, Polar has the right to match any competing proposal for TUSK in the event such a proposal is made. TUSK and Polar have each further agreed to pay the other party an expense reimbursement fee equal to the out-of-pocket expenses incurred in connection with the Arrangement Agreement and the transactions contemplated thereby, up to a maximum of CDN$2.0 million, if the Arrangement Agreement is terminated by such party under certain circumstances. TUSK Energy Corporation TUSK is engaged in the acquisition, exploration, development and production of oil and natural gas reserves in the northwestern part of the Western Canadian Sedimentary Basin. TUSK is developing natural gas in the Conroy area of northeastern British Columbia and light oil and natural gas in the Peace River Arch area of northern Alberta. TUSK has 90,443,888 common shares outstanding. TIAA TIAA is a New York-based life insurance company; CREF is a companion organization to TIAA and a SEC-registered Investment Company. Together, TIAA-CREF (www.tiaa-cref.org) is a national financial services organization with $363 billion in combined assets under management (as of 12/31/08) and is the leading provider of retirement services in the academic, research, medical and cultural fields. Forward Looking Information Certain information contained in this press release, including information and statements which may contain words such as "could", "plans", "should", "anticipates", "expects", "believes", "will" and similar expressions and statements relating to matters that are not historical facts, are forward-looking statements including, but not limited to, the completion of the acquisition of all of the TUSK shares by Polar. These forward-looking statements are based on a number of risks and assumptions, including that the parties may not get the requisite approvals or be able to get the required shareholder, court, regulatory and other approvals necessary to complete the sale of all of the TUSK shares. Risks and uncertainties also relate to the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserves estimates; the uncertainty of estimates and projections relating to production, costs and expenses; and health, safety and environmental risks), commodity prices, financing sources and exchange rate fluctuations. By their nature, forward-looking statements are subject to numerous risks and uncertainties that could significantly affect anticipated results in the future, and accordingly, actual results may differ materially from those predicted. Some of the risks and other factors that could cause results to differ materially from those expressed in the forward-looking statements contained in this press release include, but are not limited to: statements related to the timing or completion of the Arrangement; the various reasons upon which the Arrangement may not close including, on account of conditions of closing not being fulfilled or waived, a competing bid or the Arrangement not being approved by TUSK shareholders; the risk that the Arrangement Agreement may be terminated in circumstances which require the payment of the termination fee or the expense reimbursement fee; the existence of operating risks inherent in the TUSK's business; foreign currency exchange rate fluctuations; general economic, market or business conditions, including stock market volatility; the performance of the TUSK's oil and gas properties; volatility in market prices for oil and gas; estimations of future costs; geological, technical, drilling and processing problems; changes in laws or regulations, including taxation and environmental regulations; and such other risks and uncertainties described from time to time in the reports and filings made with securities regulatory authorities by TUSK, all of which may be found on SEDAR at www.sedar.com. Readers are cautioned that the foregoing list of important factors is not exhaustive. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise, and as such, undue reliance should not be placed on forward-looking statements. These statements speak only as of the date of this press release. Unless required by law, TUSK does not undertake any intention or obligation or update or revise these forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement. Contact: John RooneyTUSK Energy CorporationChief Executive Officer(403) 264-8875Website: www.tusk-energy.com ? 2007 - Marketwire |