CALGARY, Jan. 13, 2013 /CNW/ - Calvalley Petroleum Inc. ("Calvalley" or the "Company") provides the following update to its Shareholders ("Shareholder(s)") with respect to the status of its strategic review process. On
July 12, 2012, the Company formed a Special Committee of the Board of
Directors ("Directors") to oversee a process for the review of strategic alternatives
available to the Company, with a view to enhancing Shareholder value.
The Directors, in consultation with the members of the Special
Committee, have reviewed the results of that process to date and have
decided to terminate the strategic review process and to focus the
Company's efforts on organic growth, in order to maximize Shareholder
The Company also announces that in accordance with the terms of the
Shareholder Rights Plan (the "Plan") that was implemented on July 11, 2012 , the Plan together with all
outstanding rights granted thereunder were terminated and are null and
void and of no further force and effect as of 5:00 p.m. (Calgary time)
on January 11, 2013.
On July 11, 2012, the Company had implemented the Plan to discourage
discriminatory, coercive or unfair take-overs of the Company, and to
give the Directors and Shareholders time to evaluate and consider any
take-over bid or other offer for the Company and to give the Directors
time, if, in the circumstances, the Directors determined it appropriate
to pursue alternatives to maximize Shareholder value in the event an
unsolicited take-over bid was made for all or a portion of Calvalley's
outstanding Class A Common shares ("Shares"). The Plan was not adopted to prevent a take-over of the Company, to
secure the continuance of Company Management or the Directors in their
respective offices, or to deter fair offers for the Shares.
In order for the Plan to continue in full force and effect, in
accordance with its terms, a majority of the independent Shareholders
would have had to ratify and confirm the Plan prior to the close of
business on January 11, 2013. Due to the cost and timing of holding a
Shareholder's meeting for the purposes of ratifying the Plan, the
Directors decided to forego ratification and confirmation of the Plan
at this time and to allow the Plan to terminate, in accordance with its
The Company also announces that it intends to make an Offer (the "Offer") to purchase, from Shareholders for cancellation, up to 15,000,000 of
its outstanding Shares, at a purchase price of $2.45 per Share,
representing a premium of approximately 53% to the closing trading
price of $1.60 on the Toronto Stock Exchange on Friday, January 11,
As of January 11, 2013, there were 94,329,159 shares outstanding and,
accordingly, the Offer is for up to approximately 15.9% of the
outstanding Shares. If the maximum number of Shares are taken-up and
paid for, under the Offer, the aggregate purchase price to Calvalley,
before costs and expenses of the Offer, will be $36,750,000, which
Calvalley intends to finance with existing cash on hand. If more than
15,000,000 Shares are tendered to the Offer, the Company will purchase
the Shares on a pro rata basis according to the number of Shares deposited. The Offer will be
subject to various conditions, typical for transactions of this nature
and will remain open for at least 35 days after the date of
commencement of the Offer. Full details of the Offer, including
instructions on how Shareholders can tender their Shares to the Offer,
are to be included in the Offer to Purchase and Issuer Bid Circular of
the Company (the "Offer and Circular") that is anticipated to be mailed to registered Shareholders and filed
with applicable securities regulators on or about January 22, 2013.
The Directors believe that the purchase of Shares under the Offer
represents an effective use of the Company's financial resources and is
in the best interests of Calvalley, as it believes the recent trading
prices of the Shares are not fully reflective of the value of the
Company's assets, operating business and future prospects. The
Company's current estimate of cash and working capital is in excess of
US$100 million and the purchase of the Shares under the Offer is not
expected to impact the Company's current operations or to preclude the
Company from pursuing future growth opportunities.
Neither the Company nor its Directors make any recommendation to
Shareholders as to whether to tender their shares to the Offer.
Shareholders are strongly encouraged to review the Offer and Circular
carefully and to consult with their financial and tax advisors prior to
making any decision with respect to the Offer.
The Company has retained Jennings Capital Inc. as its financial advisor
and dealer manager in respect of the Offer.
Further information can be found in the disclosure documents filed by
the Company with the securities regulatory authorities, available at www.sedar.com or through the Company's website at www.calvalleypetroleum.com.
About Calvalley Petroleum Inc.
Calvalley is an international oil and gas company, with offices in
Calgary, Alberta, Canada, that operates its 50% working interest in
Block 9 of the Masila Basin, in the Republic of Yemen.
THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
This press release contains forward-looking statements. All statements
other than statements of historical fact contained in this press
release are forward-looking statements. You can identify many of these
statements by looking for words such as "believes", "expects", "will",
"intends", "projects", "anticipates", "estimates", "continues" or
similar words or the negative thereof. These forward-looking statements
include statements with respect to the making and timing of the Offer
and the amount of the purchase price. There can be no assurance that
the plans, intentions or expectations upon which these forward-looking
statements are based will occur. Forward-looking statements are subject
to risks, uncertainties and assumptions, including, but not limited to,
those discussed elsewhere in this press release. There can be no
assurance that such expectations will prove to be correct. Some of the
factors that could affect future results and could cause results to
differ materially from those expressed in the forward-looking
statements contained herein include, but are not limited to, any delay
or failure to satisfy the conditions to take up under the Offer. The
forward-looking statements contained herein are expressly qualified in
their entirety by this cautionary statement. The forward-looking
statements included in this press release are made as of the date of
this press release and Calvalley assumes no obligation to update or
revise them to reflect new events or circumstances except as expressly
required by applicable securities law.
Calvalley has not yet commenced the Offer referred to in this press
release. Upon the commencement of the Offer, Calvalley will file the
Offer and Circular with the applicable provincial securities
commissions in Canada. The Offer and Circular will contain important
information about the Offer and should be read by Shareholders. When
the Offer is commenced, one will be able to obtain the Offer and
Circular and all other documents at no charge when they become
available on the system for electronic document analysis and retrieval
(SEDAR) at www.sedar.com. Accordingly, this announcement does not constitute or form part of any
offer or invitation to purchase, otherwise acquire, subscribe for,
sell, or otherwise dispose of, or any solicitation of any offer to
sell, otherwise dispose of, issue, purchase, otherwise acquire or
subscribe for, any security. The release, publication or distribution
of this announcement in certain jurisdictions may be restricted by law
and therefore persons in such jurisdictions into which this
announcement is released, published or distributed should inform
themselves about and observe such restrictions.
SOURCE: Calvalley Petroleum Inc.
For further information:
firstname.lastname@example.org or +1 (403) 297-0490
Edmund Shimoon, Chairman and CEO
Gerry Elms, CFO
Dealer Manager, Jennings Capital Inc.