Dana Petroleum to Acquire Bow Valley


    CALGARY, Feb. 16 /CNW/ - Bow Valley Energy Ltd. ("Bow Valley") (TSX -
BVX) announced today that it has entered into an arrangement agreement (the
"Arrangement Agreement") with Dana Petroleum plc and Dana Petroleum (E&P)
Limited, (collectively, "Dana"). Dana is an independent U.K. oil and gas
exploration and production company with assets in the North Sea. Pursuant to
the Arrangement Agreement, Dana will acquire all of the issued and outstanding
class "A" common shares (the "Common Shares") of Bow Valley by way of a plan
of arrangement under the Business Corporations Act (Alberta) (the
"Arrangement") in a transaction valued at approximately CDN$240 million,
including the assumption of net debt, liabilities and other obligations
totalling approximately CDN$197 million. Under the terms of the Arrangement
Agreement, Dana will acquire all of the Common Shares for consideration of
CDN$0.50 in cash per Common Share. The Arrangement represents a 53% premium to
the weighted average trading price of the Common Shares for the 20 trading
days ended February 13, 2009 and a premium of approximately 70% over the
closing price of the Common Shares on February 13, 2009.
    In November 2008, the Board of Directors of Bow Valley (the "Bow Valley
Board') formed an independent special committee (the "Special Committee") to
engage in a review of strategic alternatives and to conduct discussions with
interested parties. These alternatives included, among other things, exploring
potential asset divestments, equity alternatives, strategic alliances, joint
venture opportunities, mergers or a corporate sale transaction. Throughout
late 2008 and early 2009, the Special Committee engaged in a review and
evaluation of potential strategic alternatives involving Bow Valley and its
assets. The proposed Arrangement with Dana resulted from the Company's
strategic review process and has been unanimously approved by the Special
    The Bow Valley Board, after receiving the unanimous recommendation of the
Special Committee, has unanimously approved the Arrangement. Scotia Waterous
Inc., Bow Valley's financial advisor, has provided the Special Committee and
the Bow Valley Board with its opinion that, as of the date hereof, the
consideration to be received by Bow Valley's shareholders pursuant to the
proposed Arrangement is fair, from a financial point of view. All of the
members of the Bow Valley Board and Bow Valley's executive officers, who
collectively own approximately 2.7% of the outstanding Common Shares, have
confirmed their intention to vote their Common Shares in favour of the
Arrangement in accordance with the terms of the support agreements entered
into with Dana in respect of the Arrangement.
    The Special Committee commented that over the past three months, an
exhaustive review of strategic alternatives had been completed by the Bow
Valley Board, management and their outside advisors. It also noted that the
Dana offer had been selected primarily as a result of the strong financial
position of Dana, the cash nature of the offer and relative deal certainty.
The Special Committee expressed the gratitude of the Bow Valley Board to Rob
Moffat, the President and Chief Executive Officer of Bow Valley, and to
management for their dedication and professionalism throughout this process.
    Completion of the Arrangement is subject to a number of conditions
including, but not limited to, the approval of at least 66 2/3% of the votes
cast in person or by proxy at a special meeting of Bow Valley's shareholders,
as well as customary court, regulatory (including approval under the
Investment Canada Act) and other approvals. The Arrangement is also
conditional upon Bow Valley receiving the necessary consents and waivers of
Bow Valley's lenders. Bow Valley is currently in discussions with its lending
group to extend the expiry date of its current debt facilities due on February
15, 2009 and expects to receive the appropriate waivers in due course. The
special meeting of Bow Valley shareholders is expected to be held in mid
April. An information circular in connection with the Arrangement will be
mailed to Bow Valley shareholders in mid March. The Bow Valley Board
unanimously recommends that shareholders vote in favour of the Arrangement.
    Under the Arrangement Agreement, Bow Valley has agreed that it will not
solicit or initiate any discussions concerning the pursuit of any other
acquisition proposals. Bow Valley has also agreed to pay a termination fee of
up to US$6 million to Dana in certain circumstances. In addition, Dana has the
right to match any competing superior proposal for Bow Valley in the event
such a proposal is made.

    Bow Valley is an oil and natural gas exploration, development and
production company with operations in the U.K. sector of the North Sea and in
Alaska. The common shares of Bow Valley trade on the TSX under the symbol BVX.
Additional information relating to Bow Valley may be found on the SEDAR
website at www.sedar.com.

    Certain statements included or incorporated by reference in this news
release constitute forward-looking statements or forward-looking information
under applicable securities legislation. Forward-looking statements or
information typically contain statements with words such as "anticipate",
"believe", "expect", "forecast", "plan", "intend", "estimate", "propose", or
similar words suggesting future outcomes or statements regarding an outlook.
Although Bow Valley believes that the expectations reflected in such
forward-looking statements or information are reasonable, undue reliance
should not be placed on forward-looking statements because Bow Valley can give
no assurance that such expectations will prove to be correct. Forward-looking
statements or information are based on current expectations, estimates and
projections that involve a number of risks and uncertainties which could cause
actual results to differ materially from those anticipated by Bow Valley and
described in the forward-looking statements or information. The
forward-looking statements or information contained in this news release are
made as of the date hereof and Bow Valley undertakes no obligation 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. The forward looking statements or information
contained in this news release are expressly qualified by this cautionary

    %SEDAR: 00008379E

For further information:

For further information: Bow Valley Energy Ltd., Robert Moffat,
President and Chief Executive Officer, Leigh Cassidy, Vice President and Chief
Financial Officer, Phone: (403) 232-0292, Website: www.bvenergy.com

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