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)
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