Tyler receives $1.60-per-share offer
2008-01-07 05:31 ET - News Release
Mr. Jean Pierre Jutras reports
JINCHUAN GROUP TO ACQUIRE TYLER RESOURCES FOR CDN$1.60 PER SHARE
Tyler Resources Inc. has signed a definitive support agreement with Jinchuan Group Ltd., pursuant to which Jinchuan will make an offer to acquire all of the issued and outstanding common shares on a fully diluted basis of Tyler for $1.60 per share in cash. The offer values Tyler at approximately $214-million on a fully diluted basis.
The offer represents a 116-per-cent premium to Tyler's closing price on Oct. 18, 2007, the last trading day prior to the announcement of the unsolicited offer by Mercator Minerals Ltd., and represents a 60-per-cent premium to Tyler's most recent closing price on Jan. 4, 2008. In addition, the offer represents a 54-per-cent premium to Mercator's Nov. 9, 2007, unsolicited offer based on Mercator's closing price on Jan. 4, 2008.
Alan Craven, chairman of the Tyler board and the special committee, said: "In response to Mercator's hostile bid, we began an active and thorough process to identify a range of value enhancing alternatives for the company. Over the past several weeks, we received serious interest from a number of parties. In the end, Jinchuan came forward with the best offer, one that provides Tyler shareholders with immediate, strong and certain value for their company and its assets. The offer has the unanimous support of the Tyler board."
Li Yong-jun, chairman and president of Jinchuan, said: "Tyler's management team has developed Bahuerachi as one of Mexico's most notable resource projects, and in turn, has delivered significant value to its shareholders. Jinchuan looks forward to building on the efforts expended thus far to aggressively progress Bahuerachi through development and into production."
The transaction is to be effected by way of a takeover bid. Full details of the offer will be included in a formal offer and takeover bid circular, which is expected to be mailed to shareholders in early February, 2008. The transaction is expected to close in mid-March, 2008. The takeover bid circular will be accompanied by the company's directors' circular, which will provide shareholders of the company with, among other things, the rationale for the unanimous recommendation of Tyler's board of directors that shareholders accept the offer. The offer will be subject to a number of conditions, including acceptance of the offer by holders of at least 66-2/3 per cent of the outstanding shares calculated on a fully diluted basis, absence of material adverse changes and receipt of all required regulatory approvals (including Chinese government approvals).
The board of directors of Tyler has unanimously determined that the offer is fair to Tyler's shareholders and is in the best interests of the company and its shareholders. The board recommends that shareholders tender to the offer. A special committee of Tyler's board of directors and the board have received an opinion from Tyler's financial adviser, CIBC World Markets Inc., that the offer is fair, from a financial point of view, to the shareholders of Tyler. In the event that the transaction with Jinchuan is not completed under certain circumstances, Tyler has agreed to pay Jinchuan a termination fee of $7,275,000 or approximately 3.4 per cent of the transaction value.
CIBC World Markets Inc. is acting as sole financial adviser, and Burnet, Duckworth & Palmer LLP is acting as legal counsel to Tyler.
BMO Capital Markets is acting as sole financial adviser, and Davies Ward Phillips & Vineberg LLP is acting as legal counsel to Jinchuan.
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