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Gold/Mining/Energy : KERM'S KORNER -- Ignore unavailable to you. Want to Upgrade?

To: Herb Duncan who wrote (11049)	6/2/1998 10:56:00 AM
From: SofaSpud	Respond to of 15196

MERGERS-ACQUISITIONS / Husky bids for Mohawk HUSKY OIL AND BALACLAVA ENTERPRISES MAKE FRIENDLY CASH BID FOR MOHAWK VANCOUVER, June 1 /CNW/ - Husky Oil Limited, of Calgary, and Balaclava Enterprises Ltd., of Vancouver, announced today they have agreed to make a joint takeover bid for all the common shares of Mohawk Canada Limited for $7.25 in cash per share. The Board of Directors of Mohawk has announced it has accepted the bid and recommends that shareholders tender to the offer. Husky has also entered into an agreement with Mr. Hugh Sutherland, the founder of Mohawk, whereby Mr. Sutherland has irrevocably committed to tender his 42 per cent interest in the outstanding common shares of Mohawk to the offer. ''This bid is the culmination of our exploration of strategic alternatives designed to enhance shareholder value,'' said William Duncan, President & CEO of Mohawk Canada Limited. ''The Board supports this bid as being representative of the true value of the Company's operations.'' CIBC Wood Gundy Securities Inc. and Capital West Partners acted as Mohawk's financial advisors for the transaction. CIBC Wood Gundy provided an opinion that the bid price is fair, from a financial point of view, to Mohawk's shareholders. Husky and Balaclava will make their offer through HB Acquisition Inc., which is 91 per cent owned by Husky and 9 per cent owned by Balaclava. If shares are taken up under the offer, a subsidiary of Balaclava will be granted the option to acquire certain assets of Mohawk including its oil recycling operations. Husky will have the right to require Balaclava's subsidiary to exercise the option. The offer is conditional on 90 per cent of the Mohawk common shares being deposited to the bid, including the approximately 21 per cent already held by Balaclava. All other conditions are further described in an Offering Circular to be mailed to Mohawk shareholders. ''The bid is part of Husky's long-term strategy to substantially increase the size of its downstream business,'' said John C. S. Lau, Chief Executive Officer of Husky Oil Limited. ''The combination of Husky and Mohawk stations will lead to a strong retail presence across Western Canada. We believe this is a fair and equitable offer which recognizes the value of this well-established Canadian company.'' ''Balaclava is pleased to partner with Husky in this bid,'' said Stuart Belkin President of Balaclava Enterprises Ltd. ''The option agreement between us will allow Balaclava to concentrate on the oil recycling portion of Mohawk's business, which is an excellent complement to Balaclava's existing environmental services businesses,'' he added. Under the terms of today's agreement between Husky, Balaclava and the Board of Mohawk, HB Acquisition Inc. will mail the offer to shareholders no later than June 5, 1998 and the offer will expire 31 days later, subject to its right to extend. Nesbitt Burns Inc. acted as Husky Oil Limited's financial advisor in this transaction and will also act as the soliciting dealer manager under the offer. Husky Oil Limited is a Canadian-based integrated oil and gas company headquartered in Calgary, Alberta. The company's operations include the exploration for and development of crude oil and natural gas, as well as the production, purchase, transportation, upgrading, refining and marketing of crude oil, natural gas, natural gas liquids, sulphur and petroleum coke, and the marketing of refined petroleum products, including asphalt. Balaclava Enterprises Ltd. is a private management holding company incorporated under the laws of British Columbia. Through subsidiaries it is active in the environmental services and recreation industries in British Columbia and in the real estate industry in Washington and Oregon. Balaclava also has investments in the sugar refining and natural resource industries. Mohawk Canada Limited is the largest marketer of alternative automotive fuels and lubricants in Western Canada. Mohawk Canada Limited's common shares and convertible debentures trade on the Toronto Stock Exchange under the trading symbol ''MHK'' and ''MHK.DB''. -30- For further information: Husky Oil Limited, Laurel Nichol (403) 298-7188 or Balaclava Enterprises Ltd., Tom Lindsay (604) 688-8533 or Mohawk Canada Limited, Gregory McKinstry (604) 293-4138