Waroona Energy (WHE-V) Acquired by Frontier Energy
October 6th 2023 - NR
Further to its Sept. 5 news release, Waroona Energy Inc. entered into a binding agreement on Oct. 6, 2023, with Frontier Energy Ltd., a non-arm's-length party to the company, under which Frontier has agreed to acquire all of the outstanding shares of Waroona that it does not already own or control.
Pursuant to the Transaction, Waroona shareholders will receive one common share of Frontier for every 4.27 common shares of Waroona that they hold which implies an offer price of C$0.069 per Waroona share (based on the Canadian dollar equivalent of the 20-day volume-weighted-average-price (VWAP) of Frontier's shares on the Australian Securities Exchange (ASX) ending on October 5, 2023.
The implied offer price under the Transaction represents a premium of 52.4 per cent and 46.8 per cent to the closing price and the 10-day trailing VWAP, respectively, of Waroona's shares on the TSX Venture Exchange (the "TSXV") prior to the announcement of the Transaction on September 5th. Upon implementation, Waroona shareholders would hold approximately 31 per cent and the common shareholders of Frontier would hold approximately 69 per cent of the combined company on a fully diluted share basis.
HIGHLIGHTS
Offer premium to Waroona shareholders of 52.4 per cent over the closing price and 46.8 per cent to the 10-day VWAP of Waroona shares prior to the announcement of the Transaction.
The combined entity will hold development approvals for total solar generation capacity of 355MW and the potential to expand to more than 1GW based on freehold land ownership and grid connections.
Combined project scale simplifies the project financing strategy and negotiations with equity participates, debt financing as well as potentially government grants.
The combined entity has AUD$22 As at 30 June 2023 million in cash, which positions it to be fully funded until a final investment decision is made.
Both companies share key stakeholders including the government at all levels, local communities, potential project financiers and equity investors. The combined company streamlines stakeholder discussions, lowers overheads and creates a more transparent plan for stakeholders to support.
The combined company aims to create a fully integrated green hydrogen and renewable energy project, with the initial early cash flow generation through the development of a solar facility.
Offer unanimously recommended by Waroona's Board of Directors.
Tony Wonnacott, Chairman, said: Waroona and Frontier have been working extremely closely through a Collaboration Agreement since re-listing, that has seen significant work completed on both companies' respective projects, including the advancement of our respective solar projects, Frontier's green hydrogen production strategy and their Australian Government Hydrogen Headstart submission and more recently the Study commenced by Waroona to develop a green hydrogen Peaking Plant which is due to be completed later this year.
Through this work, it has become clear that a combined entity will be beneficial not only through the cost savings, but also through the significantly larger and more diversified project portfolio from the combined entity.
Perhaps the largest benefit will however be a more simplified message to all stakeholders and investors regarding the Company's strategy moving forward, that is critically important given the Company's strategy to commence the development of its solar project in the first half of 2024.
Details of the Transaction
The Transaction will be implemented by way of a court-approved plan of arrangement under the Business Corporations Act (British Columbia) and will require the approval of 66 2/3 per cent of the votes cast by the holders of Waroona's common shares at a special meeting of Waroona shareholders to be held to consider the Transaction (the "Special Meeting"). In addition to approval by Waroona shareholders, the Transaction is also subject to the receipt of court approval, regulatory approvals including approval under the Investment Canada Act and from the TSXV, and other customary closing conditions for transactions of this nature. The Transaction is expected to be completed prior to the end of 2023.
The Arrangement Agreement provides for customary deal-protection provisions, including a non-solicitation covenant on the part of Waroona. The directors and senior officers of Waroona, owning in aggregate approximately 2.5 per cent of Waroona's voting securities have agreed to vote all the securities they own or control in favour of the Transaction.
There are no finder's fees payable in connection with the Transaction.
Waroona Board of Directors and Special Committee Recommendations
A special committee comprised entirely of independent directors of Waroona (the "Special Committee") unanimously recommended the Transaction to the board of directors of Waroona (the "Waroona Board"). The Waroona Board has evaluated the Arrangement Agreement with the Company's management and legal and financial advisors and, following the receipt and review of a unanimous recommendation from the Special Committee, the Waroona Board has unanimously determined that the Arrangement Agreement is in the best interests of the Company, and the Waroona Board has resolved to recommend that the Company's shareholders vote in favour of the Transaction, all subject to the terms and conditions contained in the Arrangement Agreement.
Red Cloud Securities Inc. has provided an opinion to the Special Committee and the Waroona Board, that based upon and subject to various assumptions, limitations and qualifications, the consideration to be received by the holders of Waroona common shares (other than Frontier and its affiliates) under the Arrangement Agreement is fair, from a financial point of view, to the holders of Waroona common shares.
Further details regarding the terms of the Transaction are set out in the Arrangement Agreement, which will be publicly filed by Waroona under its profile on SEDAR+ at www.sedarplus.ca. Additional information regarding the terms of the Arrangement Agreement, the background to the Transaction, the rationale for the recommendations made by the Special Committee and the Waroona Board and how Waroona shareholders can participate in and vote at the Special Meeting to be held to consider the Transaction, will be provided in the management information circular for the Special Meeting which will also be filed at www.sedarplus.ca. Shareholders are urged to read these and other relevant materials when they become available.
Advisors and Counsel
Red Cloud Securities Inc. is acting as financial advisor to Waroona, and DLA Piper (Canada) LLP is acting as legal counsel to Waroona.
Farris LLP is acting as legal counsel to Frontier on the Transaction.
ON BEHALF OF THE BOARD
For further information, contact:
Adam Kiley
President & CEO
+61 8 9200 3428 (Australia)
contact@waroonaenergy.com
Tony Wonnacott
Chairman
+1 416.953.5879 (North America)
contact@waroonaenergy.com
Website: www.waroonaenergy.com |
