IN THE NEWS / Amber Energy Delays Triggering Poison Pill
By CLAUDIA CATTANEO
Calgary Bureau Chief The Financial Post
The target of a hostile takeover, Amber Energy Inc. will wait until Oct. 6 or later before separating rights from its common shares under its shareholders' rights plan.
The company said it was premature to trigger the separation, which would have been effective on Thursday as a result of an unsolicited bid from Alberta Energy Co.
On Sept. 18, AEC offered to buy the heavy oil producer for $7 in cash for each Amber share, or 0.215 AEC shares for a maximum of three million AEC shares. The offer expires on Oct. 9 and depends on Amber removing the shareholder rights plan.
The poison pill provides that the rights, which now trade with its common shares, are separated from them eight business days after presentation of a hostile takeover offer. The rights allow shareholders to buy more Amber shares at a discount, making an
unwanted acquisition more expensive.
"They are trying to preserve all their options," said a source close to the deal. "They don't want the rights to automatically separate, and in effect trigger the poison pill, because AEC's bid is contingent on the poison pill being waived. If triggered, the bid would not be able to proceed."
Amber, which rejected AEC's offer as "opportunistic and completely inadequate," is urging shareholders to read a circular from directors that will be mailed on Monday.
"Amber is continuing its review of strategic alternatives available in the circumstances and is responding to significant interest expressed already by a third party," said president and chief executive Richard Lewanski.
"A number of parties have been through and others are scheduled to visit Amber's data rooms."
Amber shares (AMB/TSE) closed at $7.45 on Friday, up 10¢.
Soon after the poison pill was adopted in June, Amber's stock plummeted because the company lowered its production estimate for this year and next, as well as cutting capital spending to preserve cash. |
