ENERGY TRUSTS / Orion Energy Objects to Continued Unsubstantiated Claims
by PrimeWest
CALGARY, Jan. 7 /CNW/ - OET.un - TSE - Orion Energy Holdings Inc.
(''Orion'') has taken a number of steps to assist Orion Unitholders in
evaluating the hostile takeover bid by PrimeWest Energy Trust (''PrimeWest'').
These include the preparation of an independent engineering report on the
reserves of Orion effective January 1, 1999 and the commissioning of an audit
of Orion's 1999 budget in support of projections of 1999 cash distributions
which is the basis for Unitholders' potential return on investment. This
information, along with the strong recommendation by the Board of Directors of
Orion to reject the offer, has been conveyed to the public through a
Directors' Circular.
Orion takes seriously its responsibility to provide accurate and up to
date information to allow Unitholders to make an informed decision with
respect to their investment, especially in regards to expected cash
distributions and the quality of the underlying assets.
PrimeWest, on the other hand, refuses to provide specific responses to
questions based on 1999 cash distributions and continues to make misleading
and unsubstantiated public claims regarding their views of the merits of this
offer as well as vague and dismissive responses to the questions raised by
Orion.
Orion's Management and Financial Advisors find this to be offensive. In
particular, they object to the PrimeWest press release dated January 5, 1999
in which PrimeWest attempts to refute the comments cited in the Orion
Directors' Circular that support the recommendation to reject the PrimeWest
offer. PrimeWest's rebuttal is nothing more than a denial of the facts, with
no supporting information, analysis or numerical evidence to support their
views. PrimeWest claims that it has ''demonstrated'' that the transaction will
be accretive to Unitholders but refuses to provide the background analysis.
In fact, feedback received during the past three investors' meetings indicates
that PrimeWest declined to respond with the numbers or disclose specific
assumptions to questions asked by investors.
Orion is also concerned about the conduct of PrimeWest management at this
week's investor presentations in Vancouver and Montreal where they attempted
to prevent Orion personnel from making the Orion Directors' Circular
available. Many Unitholders have not yet received this information through
the mail due to the holiday season and the tight time frame of this bid. We
are surprised at PrimeWest's attitude regarding investors and investment
advisors having all the available information so that an informed decision can
be made
The Board of Orion wishes to reiterate that there are a few basic reasons
for rejecting the PrimeWest offer which Unitholders are urged to consider.
- The offer would result in lower cash distributions than would otherwise
be received by Orion Unitholders.
- The offer is well below Orion's net asset value.
- The offer would trigger significant and unnecessary transaction costs
including a bonus to PrimeWest management, further decreasing cash
distributions to Orion Unitholders.
Orion Energy Trust is an open ended conventional oil and gas royalty
trust trading on the Toronto Stock Exchange under the symbol OET.UN, with
offices located in Calgary, Alberta and in Montréal, Québec.
This information has been neither approved nor disapproved by the Toronto
Stock Exchange.
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