Rockgate Capital (RGT-T) and Mega Uranium (MGA-T) enter definitive merger deal
Aug 14, 2013 - News Release
Mega Uranium Ltd. and Rockgate Capital Corp. have entered into a definitive arrangement agreement with respect to their merger previously announced on June 6, 2013. The merger will be completed by way of an arrangement under the Business Corporations Act (British Columbia), resulting in Rockgate becoming a wholly owned subsidiary of Mega at closing. Shareholders of Rockgate will receive 2.2 common shares of Mega in exchange for each one common share of Rockgate held immediately prior to the effective time of the arrangement (subject to rounding), resulting in them owning approximately 49 per cent of the issued and outstanding shares of Mega upon completion of the merger, based upon the number of Mega's common shares currently outstanding. In connection with the merger and subject to the approval of Mega's shareholders, Mega will effect a 1:10 consolidation of its common shares immediately or shortly after the effective time of the arrangement. If the share consolidation is completed, the exchange ratio will effectively be 2.2 postconsolidation shares of Mega for each 10 Rockgate shares held immediately prior to the effective time of the arrangement.
Conditional upon completion of the arrangement, and subject to the approval of Mega's shareholders, Mega will change its name to Uranium Capital Corp. and a new board of directors will be elected, composed of five nominees of Mega and four nominees of Rockgate.
The arrangement agreement contains customary deal support provisions, including a reciprocal break fee of $1-million payable by Mega or Rockgate, as the case may be, to the other party if the merger is not completed in certain circumstances. In addition, the arrangement agreement includes customary non-solicitation covenants by Rockgate and Mega, as well as the right for Mega and Rockgate, as the case may be, to match any superior proposal that may arise.
The completion of the merger is subject to satisfaction of certain customary conditions, including, but not limited to, Mega and Rockgate shareholder approvals, and court and regulatory approvals, including approval by the Toronto Stock Exchange. The necessary approvals of the shareholders of Mega and Rockgate will be sought at their respective special shareholder meetings expected to be held on or about Sept. 25, 2013. Assuming all the terms and conditions of the merger are satisfied, closing is expected to take place in early October, 2013.
Dundee Securities Ltd., financial adviser to Rockgate and its board of directors, has provided an opinion to the effect that, as of the date hereof and subject to the assumptions, limitations and qualifications set out therein, the consideration to be received by Rockgate shareholders pursuant to the merger is fair, from a financial point of view, to Rockgate shareholders.
Stewart Taylor, Mega's president, stated: "The execution of a definitive arrangement represents significant progress and a reciprocal commitment of the parties in advancing our merger. We are also very focused on consummating the sale of Lake Maitland to Toro Energy, announced earlier this week, and see our merger with Rockgate, together with the Toro Energy transaction, as major efforts aimed at creating value and contributing to the long-term strength of Mega as a diversified uranium company."
Rockgate president Karl Kottmeier commented: "I am pleased to announce this definitive agreement with Mega. By combining these two companies, we are creating a truly diversified junior uranium-focused company and what we believe is a compelling uranium investment opportunity. With the recently announced sale of the Lake Maitland project, Mega management will add over $37-million (Australian) worth of Toro shares to its existing $12.5-million equity portfolio and significantly reduce its expenditure rate. The new management team will continue to focus on advancing our principal projects, including the Falea deposit; managing the portfolio of investments; and seeking new opportunities to build shareholder value in the uranium space."
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