Friday, 23 October 2015


Lagos-based Delta Oil Nigeria B.V has perfected plans to acquire the shares of Mart Resources Inc., under an ‘arrangement agreement’ sealed by the two companies recently.

Under the terms of the arrangement agreement, an indirect wholly owned subsidiary of Delta will acquire all of the issued and outstanding common shares of Mart by way of a plan of arrangement under the Business corporations Act (Alberta) (the “Arrangement”) each Mart shareholder will receive $0.35 in exchange for each Mart common share held (the “per share consideration”) for aggregate consideration of all Mart shares of approximately $124.92 million.

According to Mart in a statement, at closing, the company is expected to have approximately $200.5 million of outstanding bank debt. It said that the per share consideration represents an 84 per cent premium to the closing price and an 86 per cent premium to the 20 day VWAP price of Mart’s common shares on the Toronto Stock Exchange (“TSX”), the last trading day for Mart’s common shares prior to the date of this announcement.

It disclosed that the board of directors of Mart, following receipt of a unanimous recommendation by a special committee of independent directors of Mart constituted to review strategic alternatives (the “Special Committee”), has unanimously determined that the Arrangement is fair to Mart shareholders and option holders and that the Arrangement is in the best interests of the company and its security holders and recommends that shareholders and option holders vote in favour of the Arrangement.

FirstEnergy Capital LLP has provided the special committee with a verbal opinion that the Cash Consideration under the Arrangement is fair, from a financial point of view, to Mart shareholders.

The company said that while the offer price of $0.35 to be paid to Mart shareholders pursuant to the Arrangement is lower than the price offered to shareholders under the previously terminated transaction with Midwestern Oil & Gas Company Limited, it is considered to be fair by the board of directors of Mart because of the significant worsening of the broader macro-environment for emerging market exploration and development companies, including forecast oil prices being $15 to $20 per barrel lower than when the previous offer was made; increased volatility of net cash flows from Mart’s current operations; and significant constraints on available working capital due to Mart’s ongoing obligations to service the Company’s significant level of debt.

It explained that the Arrangement is subject to customary conditions for a transaction of this nature, which include court approvals, applicable third party approvals, including consent of Mart’s lenders to the change of control, applicable regulatory and stock exchange approvals, the approval of 66 two and three per cent of Mart shareholders and 66 two and three per cent of Mart shareholders and option holders (voting together as a single class) represented in person or by proxy at a special meeting of Mart shareholders and option holders to be called to consider the Arrangement.

It stated: “The Arrangement Agreement includes customary non-solicitation covenants by Mart and provides Mart with the ability to respond to unsolicited proposals considered superior to the Arrangement in accordance with the terms of the Arrangement Agreement. In the event Mart accepts a superior proposal, Mart will be required to pay a break fee of $2.9 million to Delta”. (guardian)