Addax Petroleum announces all cash offer
24 Juin 2009 - 11:26AM
UK Regulatory
TIDMAXC
RNS Number : 4085U
Addax Petroleum Corporation
24 June 2009
ADDAX PETROLEUM ANNOUNCES C$52.80 PER SHARE CASH OFFER BY SINOPEC INTERNATIONAL
PETROLEUM EXPLORATION AND PRODUCTION CORPORATION
Calgary, June 24, 2009 /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?% 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 additional information, please contact:
+-------------------------------------------+---------------------------------------+
| Mr. Craig Kelly | Mr. Nick Cowling |
| Investor Relations | Press Relations |
| Tel.: +41 (0) 22 702 95 68 | Tel.: +1 (416) 934 80 11 |
| craig.kelly@addaxpetroleum.com | nick.cowling@cossette.com |
| Mr. Chad O'Hare | Mr. Mark Antelme |
| Investor Relations | Press Relations |
| Tel.: +41 (0) 22 702 94 10 | Tel.: +44 (0) 20 7337 1500 |
| chad.o'hare@addaxpetroleum.com | mark.antelme@pelhampr.com |
| Ms. Marie-Gabrielle Cajoly | |
| Press Relations | |
| Tel.: +41 (0) 22 702 94 44 | |
| marie-gabrielle.cajoly@addaxpetroleum.com | |
+-------------------------------------------+---------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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