CALGARY, ALBERTA--(Marketwire - March 15, 2012) -
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.
Reliable Energy Ltd. ("Reliable" or the "Company") (TSX VENTURE:REL) is pleased to announce that it has entered into an arrangement agreement (the "Agreement") whereby Crescent Point Energy Corp. ("Crescent Point") will acquire all of the issued and outstanding common shares of Reliable not already held by Crescent Point in a transaction valued at approximately $99.1 million, including net debt of $20 million at March 14, 2012 (the "Arrangement"). Under the terms of the Arrangement, each common share of Reliable shall be exchanged for 0.00794 common shares of Crescent Point. Reliable shareholders will receive an aggregate value of
.362 per common share of Reliable based on a five-day weighted average trading price per Crescent Point share of $45.61 which represents a premium of 19 percent to the closing price of Reliable common shares on the TSX Venture Exchange as at March 14, 2012. The Arrangement is expected to be tax-deferred for Canadian resident shareholders of Reliable.
Reliable's Board of Directors and management view this as an advantageous transaction for Reliable's shareholders. It is anticipated that existing Reliable shareholders will receive value for the Company through the diversification and liquidity of the large oil portfolio provided by Crescent Point, as well as access to an anticipated monthly dividend stream.
Board of Directors Recommendation and Financial Advisors
Reliable's Board of Directors has unanimously approved the Agreement, determined that the Arrangement is in the best interests of Reliable and is fair to the Reliable shareholders and resolved to recommend that Reliable shareholders vote in favour of the Arrangement.
Canaccord Genuity Corp. ("Canaccord") is acting as exclusive financial advisor to Reliable with respect to the Arrangement. Each of Canaccord and Raymond James Ltd. ("RJ") has provided the Board of Directors of Reliable with its opinion that the consideration to be paid by Crescent Point pursuant to the terms of the Agreement is fair, from a financial point of view, to Reliable shareholders.
The Agreement provides that Reliable will pay Crescent Point a non-completion fee of $4 million, in certain circumstances and that a reciprocal non-completion fee will be payable by Crescent Point to Reliable in certain circumstances. The Agreement also provides for customary non-solicitation covenants, including that Reliable has the right to respond to superior proposals and that Crescent Point has the right to match any such proposal.
All of the directors and officers exercising control or direction over approximately 10.4% of Reliable's fully diluted shares have agreed to vote their shares in favour of the Arrangement.
The Arrangement is subject to stock exchange, court and regulatory approval, and the approval of at least 66 2/3 percent of Reliable shareholders who vote at a meeting to be called to vote on the Arrangement.
It is expected that a management information circular and proxy statement detailing the Arrangement and including the written fairness opinion of RJ will be sent to Reliable's shareholders on or before April 4, 2012, with a shareholder meeting scheduled to occur on May 1, 2012.
ABOUT RELIABLE
Reliable Energy Ltd. is an Alberta based junior oil company whose activities are primarily focused in the Kirkella area situated on the Saskatchewan/Manitoba border.
Common shares of Reliable Energy Ltd. are listed for trading on the TSX Venture Exchange under the symbol REL.