CALGARY, May 23, 2012 /CNW/ - CanRock Energy Corp. ("CanRock")(TSXV: CNK) and Alston Energy Inc. ("Alston")(TSXV: ALO) are pleased to announce that they have entered into a definitive arrangement agreement effective May 22, 2012 (the "Arrangement Agreement") to effect a strategic business combination (the "Transaction") resulting in the formation of a light oil focused, growth oriented junior exploration and production company.
Alston and CanRock are at arm's length with each other and the Transaction will not result in the creation of any new control person or a "change of control" as that term is defined under TSX Venture Exchange ("TSXV") policies. Once the Arrangement is completed, the resulting entity will continue under the name Alston Energy Inc.
An information circular is anticipated to be mailed to the shareholders of CanRock in early June 2012 in connection with a meeting of such shareholders expected to be held in early July 2012, with closing of the Transaction expected to take place shortly thereafter. The Transaction will be completed by way of a Plan of Arrangement (the "Arrangement") whereby CanRock shareholders will exchange all of their issued and outstanding common shares ("CanRock Common Shares") for common shares of Alston ("Alston Common Shares) on a basis of 2.321 Alston Common Shares for each CanRock Common Share. The vesting of the outstanding CanRock stock options will be accelerated and such options will be exercisable until the earlier of the expiry date of such option and the date that is 90 days following the effective date of the Arrangement. Outstanding CanRock warrants will be adjusted in accordance with their terms such that CanRock warrants will be exercisable into Alston Common Shares instead of CanRock Common Shares and into such number of Alston Common Shares as a holder of CanRock Common Shares is entitled to receive pursuant to the Arrangement. As a result of the Transaction, CanRock will be a wholly-owned subsidiary of Alston.
The Arrangement requires the approval of the holders of CanRock Common Shares. The Arrangement Agreement provides that CanRock must call a shareholder meeting to approve the Arrangement and that the Arrangement must be approved by no later than July 5, 2012. The Arrangement is subject to the approval of the TSXV and all applicable regulatory authorities. Completion of the Arrangement is also subject to a number of additional conditions set out in the Arrangement Agreement. Under the Arrangement Agreement, subject to certain exceptions, CanRock and Alston have each agreed that they will not solicit or initiate any discussions concerning any business combination or the sale of material assets. The Arrangement Agreement provides for a mutual non‐completion fee of $0.5 million if the Arrangement is not completed in certain circumstances.
A copy of the Arrangement Agreement will be filed on SEDAR and will be available for viewing under the profiles of each of Alston and CanRock at www.sedar.com.
The Board of Directors of CanRock has unanimously determined that the Arrangement and Arrangement Agreement are in the best interests of CanRock and its shareholders, and, relying on a verbal fairness opinion from Emerging Equities Inc., have determined that the consideration to be received by the shareholders of CanRock is fair, from a financial point of view. The Board of Directors of CanRock has unanimously recommended that their shareholders approve the Arrangement. In addition, the Board of Directors of Alston has approved the Arrangement and the entering into of the Arrangement Agreement.
Emerging Equities Inc. is acting as exclusive financial advisor to CanRock with respect to the Arrangement. Integral Wealth Securities Limited is acting as exclusive financial advisor to Alston with respect to the Arrangement and shall receive, subject to TSXV approval, as partial compensation in respect thereof, a total of 1,333,333 Alston Common Shares at a deemed price of $0.15 per share.
All of the directors and officers of CanRock, and all of the shareholders of CanRock holding greater than 10% of the CanRock Common Shares, holding a total of 5,675,081 CanRock Common Shares, representing approximately 12.8% of the outstanding CanRock Common Shares, have entered into agreements with Alston pursuant to which they have agreed to vote their CanRock Common Shares in favour of the Arrangement.
About Alston Energy Inc.: Alston is a junior oil and gas company, continued in Alberta, and listed on the TSXV. Its primary exploration focus is in north-Central Alberta. More information about Alston can be found on SEDAR under the company's profile at www.sedar.com.
About CanRock Energy Corp.: CanRock is a junior oil and gas company, incorporated in Alberta, and listed on the TSXV. Its primary exploration and production focus is in Provost, Alberta. More information about CanRock can be found on SEDAR under the company's profile at www.sedar.com.
Forward-Looking Statements: This press release contains forward-looking information. More particularly, this press release contains statements concerning the completion of the Transaction described herein, the timing of the special meeting of shareholders of CanRock and the anticipated results therefrom. Although CanRock and Alston believe in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate, that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because neither CanRock nor Alston can give any assurance that they will prove to be correct. Forward-looking information involves known and unknown risks, uncertainties, assumptions (including, but not limited to, assumptions on the performance and financial results of the resulting issuer) and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. The terms and conditions of the prospective Transaction may change based on regulatory and third party comments, consents and approvals and the ability to meet the conditions of the Arrangement Agreement in the required and anticipated timeframes. The forward-looking statements contained in this press release are made as of the date hereof and neither CanRock nor Alston undertake any obligations to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Completion of the proposed Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance. The proposed Transaction cannot close until the required CanRock shareholder approval is obtained. There can be no assurance that the proposed Transaction will be completed as proposed or at all.
This press release is not an offer of the securities for sale in the United States. The securities have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an exemption from registration. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.
Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the proposed Transaction, any information released or received with respect to the proposed Transaction may not be accurate or complete and should not be relied upon.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.
For further information:
ALSTON ENERGY INC.
Don K. Umbach, President
Telephone: (403) 245-4261
Troy Winsor, VP Business Development
CANROCK ENERGY CORP.
Bruce Eckert, President
Telephone: (403) 265-2770