|
Calvalley Petroleum swallows poison pill
2012-07-11 21:24 PT - News Release
Mr. Nikolas Perrault reports
CALVALLEY PETROLEUM INC. (TSX: CVI.A) ANNOUNCES THE ESTABLISHMENT OF A SPECIAL COMMITTEE, THE ENGAGEMENT OF ADVISORS, AND THE ADOPTION OF A SHAREHOLDER RIGHTS PLAN
Calvalley Petroleum Inc.'s board of directors has established a special committee to explore and consider strategic alternatives with the objective of maximizing value for all shareholders. The special committee members, all of which are members of the board and are independent of management, are Nikolas Perrault (chairman), Thomas H. Skupa, Kenneth M. Stephenson and Thomas E. Valentine. The special committee was established in response to the DNO International ASA press release dated July 5, 2012, whereby DNO expressed its intention to make an unsolicited takeover bid of the corporation. The board has retained TD Securities Inc. as its independent financial adviser and Kingsdale Shareholder Services Inc. as its shareholder communications agent to assist in this process.
In addition, the corporation has adopted a shareholder rights plan that is similar to existing shareholder rights plans adopted by other Canadian public companies. The objectives of the plan are, to the extent possible, to prevent a creeping takeover of the corporation by requiring that any offer to acquire Class A common voting shares of the corporation is made to all shareholders of the corporation for all of their common shares and cannot be completed unless at least 50 per cent of the outstanding common shares are tendered in favour of the offer, and to encourage the fair treatment of all shareholders in connection with any takeover bid for the corporation. The plan discourages discriminatory, coercive or unfair takeovers of the corporation, gives the board and shareholders time to evaluate and consider any takeover bid for the corporation and gives the board time if, in the circumstances, the board determines it is appropriate to take such time, to pursue alternatives to maximize shareholder value in the event an unsolicited takeover bid (such as the DNO offer) is made for all or a portion of the outstanding common shares. The plan was not adopted to prevent a takeover of the corporation, to secure the continuance of management or the directors in their respective offices, or to deter fair offers for the common shares. Collectively, the directors and officers of Calvalley, together with their associates, exercise control or direction over approximately 21 per cent of the issued and outstanding common shares.
In order to implement the adoption of the plan, the issuance of one right in respect of each common share outstanding at the close of business on July 11, 2012, has been authorized. The plan also authorizes the issuance of one right in respect of any common share issued after the record time. The rights initially trade with and are represented by the corporation's common share certificates, including certificates issued prior to the record time. Accordingly, until such time as the rights separate from the common shares and become exercisable, rights certificates will not be distributed to shareholders. With respect to the DNO offer, the separation time of the rights has been deferred until a later date to be determined by the board or the special committee on behalf of the board.
If a person, or a group acting in concert, acquires (other than pursuant to an exemption available under the plan) beneficial ownership of 20 per cent or more of the outstanding common shares, the rights (other than those held by such acquiring person which will become void) will permit the holder thereof to purchase common shares at a substantial discount to their then-prevailing market price. At any time prior to the rights becoming exercisable, the board may waive the operation of the plan with respect to certain events before they occur.
The issuance of the rights is not dilutive and will not affect reported earnings or finances from operations per share until the rights separate from the underlying common shares and become exercisable or until the exercise of the rights. The issuance of the rights will not change the manner in which shareholders currently trade their common shares. The plan is subject to approval of the Toronto Stock Exchange.
We seek Safe Harbor.
|