Addax Petroleum announces C$52.80 per share cash offer by Sinopec International Petroleum Exploration and Production Corporation



    CALGARY, June 24 /CNW/ - Addax Petroleum Corporation ("Addax Petroleum"
or the "Corporation") (TSX: AXC and LSE: AXC) announced today that it has
entered into a definitive agreement (the "Support Agreement") with Sinopec
International Petroleum Exploration and Production Corporation ("SIPC")
pursuant to which SIPC has agreed, subject to the terms of the Support
Agreement, to make an offer to acquire all of the outstanding common shares of
Addax Petroleum by way of a negotiated take-over bid (the "Offer") for C$52.80
per common share in cash. The Offer represents a 47% premium to the closing
market price on the TSX of the Addax Petroleum common shares on June 5, 2009,
the day prior to Addax Petroleum's public announcement that it was in
preliminary discussions with parties regarding a potential transaction. SIPC
is a wholly owned subsidiary of China Petrochemical Corporation ("Sinopec
Group") and undertakes overseas investments and operations in the upstream oil
and gas sector. Sinopec Group is China's largest producer and supplier of oil
products and major petrochemical products.
    The Support Agreement provides for, among other things, customary
provisions relating to support of Addax Petroleum's board of directors,
non-solicitation and right to match covenants in favour of SIPC and the
payment to SIPC of a termination fee of C$300 million if the acquisition is
not completed in certain specified circumstances. The obligation of SIPC to
take up and pay for Addax Petroleum common shares pursuant to the Offer is
also subject to the receipt of certain approvals from the Government of The
People's Republic of China. SIPC has agreed to pay a break-up fee of C$300
million in the event that all approvals required to be obtained by SIPC from
the Government of The People's Republic of China have not been obtained by
August 24, 2009 and Addax Petroleum elects to terminate the Support Agreement.
The acquisition of the Addax Petroleum common shares is not conditional on
financing.
    In connection with the Offer, AOG Holdings BV, a wholly owned subsidiary
of the Addax & Oryx Group Ltd, and Jean Claude Gandur, President and Chief
Executive Officer of Addax Petroleum, have each entered into lock-up
agreements with SIPC pursuant to which they have agreed to, among other
things, tender their Addax Petroleum common shares to the Offer. Addax
Petroleum's other senior officers and directors will also enter into lock-up
agreements. The total lock-up agreements represent approximately 38% of
outstanding Addax Petroleum common shares (calculated on a fully-diluted
basis).
    The Support Agreement also provides that if SIPC acquires not less than
66 2/3% of the outstanding Addax Petroleum common shares under the Offer, SIPC
will comply, or cause Addax Petroleum to comply, with the terms of the 3.75%
convertible notes of Addax Petroleum due May 31, 2012.
    Addax Petroleum's board of directors, after consulting with its financial
and legal advisors, has unanimously determined that the Offer is fair to the
holders of Addax Petroleum common shares and is in the best interests of Addax
Petroleum and has recommended acceptance of the Offer by holders of Addax
Petroleum common shares. RBC Capital Markets, the financial advisor to Addax
Petroleum's board of directors, has provided an opinion that the consideration
to be received by the holders of Addax Petroleum common shares under the Offer
is fair, from a financial point of view, to such holders.
    Commenting, Addax Petroleum's President and Chief Executive Officer, Jean
Claude Gandur, said: "We are pleased that Sinopec has recognised the highly
attractive asset portfolio and exceptional team that we have assembled at
Addax Petroleum. The efforts and accomplishments that Addax Petroleum has
achieved thus far will be built on through increased investment in the
business and acceleration of development and exploration plans. While Addax
Petroleum will cease to be a publicly traded company, we look forward to
continuing our business in the countries in which we operate for the benefit
of all stakeholders."
    Formal documentation relating to the take-over bid is expected to be
mailed by SIPC in early July 2009. The Offer will be open for acceptance for a
period of not less than 35 days and will be conditional upon, among other
things, valid acceptance of the Offer by Addax Petroleum shareholders owning
not less than 66 2/3% of the outstanding Addax Petroleum common shares
(calculated on a fully-diluted basis). In addition, the Offer will be subject
to certain customary conditions, relevant regulatory approvals including the
receipt of approval from the Government of The People's Republic of China and
the absence of any material adverse change with respect to Addax Petroleum.
SIPC may waive certain conditions of the Offer in certain circumstances. If
the Offer is successful, SIPC has agreed to take steps available to it under
relevant securities laws to acquire any remaining outstanding Addax Petroleum
common shares.
    RBC Capital Markets is acting as financial advisor and Fasken Martineau
DuMoulin LLP is acting as legal counsel to Addax Petroleum and Osler, Hoskin &
Harcourt LLP is acting as legal counsel to the Board of Directors of Addax
Petroleum.

    About Addax Petroleum

    Addax Petroleum is an international oil and gas exploration and
production company with a strategic focus on West Africa and the Middle East.
Addax Petroleum is one of the largest independent oil producers in West Africa
and has increased its crude oil production from an average of 8.8 Mbbl/d for
1998 to an average of 134.7 Mbbl/d for the first quarter of 2009. Further
information about Addax Petroleum is available at www.addaxpetroleum.com or at
www.sedar.com.

    Reader Advisory Regarding Forward-Looking Information

    Certain statements contained in this news release, including statements
related to drilling plans, resources estimates, business strategy and goals,
development plans and schedules, results of exploration activities and dates
that areas may come on-stream, government and partner approvals and statements
that contain words such as "may", "will", "would", "could", "should",
"anticipate", "believe", "intend", "expect", "plan", "estimate", "budget",
"outlook", "propose", "project", and statements relating to matters that are
not historical fact constitute forward-looking information within the meaning
of applicable Canadian securities legislation.
    Forward-looking information is subject to known and unknown risks and
uncertainties attendant with oil and gas operations, assumptions and other
factors which may cause actual results, levels of activity and achievements to
differ materially from those expressed or implied by such statements which
include, but are not limited to: risks associated with the ability to obtain
approvals, waivers, consents, court orders and other requirements necessary or
desirable to permit or to facilitate the proposed transaction, including
regulatory and shareholder approvals; risks that the applicable conditions of
the proposed transaction may not be satisfied; imprecision of reserves and
resources estimates; ultimate recovery of reserves; volatility of and
assumptions in respect of commodity prices and general economic, market and
business conditions; assumptions in or relevant to Addax Petroleum's current
corporate guidance; industry capacity; competitive action by other companies;
refining and market margins; the ability to produce and transport crude oil
and natural gas to markets; the ability to access external sources of debt and
equity capital; weather and climate conditions; results of exploration and
development drilling and other related activities; fluctuation in interest
rates and foreign currency exchange rates; ability of suppliers to meet
commitments; actions by governmental authorities, including increases in
taxes; decisions or approvals of administrative tribunals; changes in
environmental and other regulations; international political events; and
expected rates of return. More specifically, production may be affected by
exploration success, start-up timing and success, facility reliability,
reservoir performance and natural decline rates, water handling and drilling
progress. Capital expenditures may be affected by cost pressures associated
with new capital projects, including labour and material supply, project
management, drilling rig rates and availability and seismic costs.
    The Corporation's actual results could differ materially from those
anticipated in these forward-looking statements if the assumptions underlying
them prove incorrect, or if one or more of the uncertainties or risks
described above materializes. Risk factors are discussed in greater detail in
filings made by Addax Petroleum with the Canadian provincial securities
commissions.
    Readers are strongly cautioned that the above list of factors affecting
forward-looking information is not exhaustive. Further, forward-looking
statements are made as at the date they are given and, except as required by
applicable law, Addax Petroleum does not intend, and does not assume any
obligation, to update any forward-looking statements, whether as a result of
new information or otherwise. The forward-looking statements contained in this
news release are expressly qualified by this advisory.





For further information:

For further information: Mr. Craig Kelly, Investor Relations, Tel.: +41
(0) 22 702 95 68, craig.kelly@addaxpetroleum.com; Mr. Chad O'Hare, Investor
Relations, Tel.: +41 (0) 22 702 94 10, chad.o'hare@addaxpetroleum.com; Ms.
Marie-Gabrielle Cajoly, Press Relations, Tel.: +41 (0) 22 702 94 44,
marie-gabrielle.cajoly@addaxpetroleum.com; Mr. Nick Cowling, Press Relations,
Tel.: (416) 934-8011, nick.cowling@cossette.com; Mr. Mark Antelme, Press
Relations, Tel.: +44 (0) 20 7337 1500, mark.antelme@pelhampr.com

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ADDAX PETROLEUM CORPORATION

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