Tikal recommends shareholders to accept BelAir offer
BelAir Energy Corp (2) BEC
Shares issued 14,686,800 Oct 19 2001 close $2.410
Monday Oct 22 2001 News Release
Mr. Daryl Connolly reports
Tikal Resources and BelAir Energy have entered into a definitive agreement pursuant to which BelAir will offer to purchase all of the issued and outstanding common shares of Tikal for consideration of 0.4 of a BelAir common share for each common share of Tikal. This represents a premium of 30 per cent to Tikal shareholders based on the 10-day average trading price for Tikal shares and BelAir shares.
The boards of directors of each of Tikal and BelAir has approved the proposed transaction and the board of directors of Tikal has resolved unanimously to recommend that its shareholders accept the BelAir offer. The board of directors of Tikal has agreed that it will not solicit or initiate discussions or negotiations with any third party concerning any sale of any material position or assets of Tikal, or any business combination involving Tikal. Griffiths McBurney & Partners acted as financial adviser to Tikal and will provide a fairness opinion in connection with the transaction.
The proposed transaction will be subject to, among other things, completion of satisfactory due diligence on behalf of both parties, tendering of a minimum of two-thirds of the common shares of Tikal (on a fully diluted basis) to BelAir and obtaining the required regulatory approvals. Tikal has agreed, under certain circumstances, to pay to BelAir a non-completion fee of $1-million.
As result of the transaction, BelAir will have approximately 25.2 million shares issued and outstanding. The company will have production of approximately 3,300 barrels of oil equivalent per day at a 6:1 conversion of natural gas to oil, comprising 15.9 million cubic feet of natural gas per day and 650 barrels of oil and natural gas liquids per day.
According to Tikal president, Daryl Connolly: "The combination of our two companies will result in a larger, stronger company focused on exploration going forward. We gain a more diversified asset base, a stronger balance sheet with which to develop the potential on our large undeveloped land base, and an experienced and aggressive BelAir management team."
"This business combination is a good fit of the two companies and will be beneficial to both companys' shareholders," declared Vic Luhowy, president of BelAir Energy. "Tikal's solid exposure to and success in exploring for long-life reserves in northeastern British Columbia and northwestern Alberta will balance BelAir's base of established reserves, production and cash flow from its core areas of Doris and Penhold. In 2001, BelAir initiated its exploration program in northeastern British Columbia and Tikal's existing program will complement that effort. Tikal's production and exploitation program in Turin complements BelAir's operations in central Alberta."
As part of the transaction, Tikal will be entitled to nominate one independent director to BelAir's board.
It is proposed that the combined company will continue to be listed on the Toronto Stock Exchange (TSE) subject to the approval of the TSE and regulatory agencies.
WARNING: The company relies upon litigation protection for "forward-looking" statements. |
