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Bullboard - Stock Discussion Forum Pace Oil & Gas Ltd T.PCE

TSX:PCE - Post Discussion

Pace Oil & Gas Ltd > No Vote Continues to Gain Momentum....
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Post by echo2 on Feb 11, 2013 11:16am

No Vote Continues to Gain Momentum....

Nova Bancorp Reports Growing Opposition to the Pace Arrangement 


Vancouver, British Columbia--(Newsfile Corp. - February 11, 2013) -  Nova Bancorp Ltd. ("Nova Bancorp") 
is very encouraged by the growing opposition to the Pace deal. On January 29, 
2013, Nova Bancorp announced its plan to oppose the business combination 
involving Pace Oil & Gas Ltd., AvenEx Energy Corp. and Charger Energy Corp. 
(the "Arrangement"). Pursuant to exemptive relief from the Alberta Securities 
Commission that we obtained in order to execute our plan, Nova Bancorp is 
permitted to make non-public solicitations to not more than 15 Pace 
shareholders. Nova Bancorp has spoken with 8 of Pace's largest shareholders. 7 
of these 8 shareholders have advised us that they intend to vote against the 
Pace Arrangement. In addition, Nova Bancorp has received unsolicited reports 
from other Pace shareholders who also intend to vote no. There is clearly 
growing opposition to the Arrangement. Shareholders are not satisfied with the 
deal or the management of Pace. 


THIS DEAL CAN STILL BE STOPPED. 


Only Three Days Left to Vote 


Nova Bancorp urges Pace shareholders to vote against the Arrangement. 



 Vote against the Arrangement using the form of proxy or 
 voting instruction provided by Pace. 

 The cutoff for internet or telephone voting is 10:00 am Calgary time 
 Wednesday, February 13 to meet the Pace deadline of 
 Thursday, February 14. 

 Shareholders using internet or telephone voting can change their 
 voting instructions more than once and at any time prior to the 
 cutoff. 

 Do not appoint Nova Bancorp Ltd., Jack Muir or Rick 
 Wlodarczak as your appointee. Leave blank or name another individual. 


Four Reasons for Opposing the Pace Arrangement 

    1. 
   
The limited sale process was not 
adequate


Pace shareholders were not well served when Pace engaged 
     its financial advisor to "conduct a non-public, confidential, limited 
     party sale process." It's unacceptable that the result of this process was 
     a non-arm's length deal. Since the Arrangement was announced, Pace shares 
     have fallen more than 8% to close at $3.11 on Friday.
     
2. 

Pace shareholders would be unfairly 
 diluted


The Arrangement is unfair to Pace shareholders on an 
     absolute basis and a relative basis. We estimate Break-up Value at $5.40 
     per share. In Q3 2012 the consensus target price of the six analysts 
     covering Pace was $5.29. The proposed exchange ratios also undervalue 
     Pace's relative contributions to the combined entity. While Pace 
     represents 64% of combined cash flow, Pace shareholders will only own 47% 
     of Spyglass.

 

3. 
   
The proposed dividend is not sustainable  
   
The Spyglass dividend will not be sustainable. This view 
     is shared by other analysts not involved in the transaction. Our modeling 
     indicates that more funds from operations will need to be invested in 
     asset development at the expense of dividends.

4. 

The Arrangement does not improve the management of Pace assets


The Arrangement looks more like a game of musical chairs than a serious attempt to improve management and bolster market confidence. In addition, the top five members of the Pace management team will receive cash payments of 
$5.3 million.


Next Steps Part 2 

Our press release of February 1, 2013 outlined some minimum changes that would have to follow a no vote.  We can confirm that there is a growing consensus among a number of the largest Pace shareholders that significant changes must be made if 
shareholder value is going to be maximized. Their focus on change is coupled with an informed optimism that there's simply a better deal out there. If the Arrangement is voted down by the shareholders including some of the largest 
shareholders, Nova Bancorp believes that the Pace should be receptive to significant changes.  If Pace was not receptive, Nova Bancorp and certain other shareholders would be prepared to organize a second shareholder initiative. 



Notice 


This solicitation is being made by Nova Bancorp and not by or on behalf of the management of Pace Oil & Gas Ltd. Except for certain non-public solicitations, any solicitation will be made by broadcast, speech or publication. Nova Bancorp will 
bear all the costs and expenses associated with such solicitation. Affiliates or associates of Nova Bancorp own an aggregate of 108,200 Pace common shares ("Shares"), representing approximately 0.23% of the total Shares issued and 
outstanding as of the record date. Nova Bancorp Investments Ltd., an affiliate of Nova Bancorp owns 65,200 Shares.  Jack Muir and Rick Wlodarczak own or control an aggregate of 43,000 Shares. Messrs. Muir and Wlodarczak are officers of Nova Bancorp 
and its affiliates. 



Vote against the Arrangement using the form of proxy or voting instruction provided by Pace. Shareholders may subsequently revoke such proxy in any manner permitted by law. If you have previously voted on the form of proxy or voting 
instruction form sent to you by Pace, you may revoke your vote by voting on the internet, by fax, by mail or over the telephone (as available). Only your latest dated form of proxy or voting instruction form will be counted. 



The address of Pace Oil & Gas Ltd. is 1700, 250-2 Street S.W., Calgary, Alberta T2P 0C1. 



Nova Bancorp is a member of Nova Bancorp Group (www.novabancorp.com), a private investment company based in Vancouver. Nova Bancorp has considerable experience with oil & gas investments and with shareholder 
activist situations. 



For further information: 



Jack Muir 

604-891-8782 

jackmuir@novabancorp.com 



Rick Wlodarczak 

604-891-8791 

rickwlodarczak@novabancorp.com 



Website 

www.keeppace.ca

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