CanadianOxy announces intention to bid For Wascana-Cash offer to be $20.50 per share.
"CanadianOxy's North American operations are a dependable source of production and cash flow and are vital to our strategy for global growth", said David Hentschel, President and Chief Executive Officer of CanadianOxy. "Wascana's assets will complement and strengthen these operations."
Following a meeting of the Board of Directors of Wascana, Ted Hanlon, Chairman, said: "The Directors have reviewed the offers for Wascana's shares that have been received and have concluded that the bid by CanadianOxy is the most beneficial for shareholders and recommend that it be accepted".
The Offer has the unanimous support of Wascana's and CanadianOxy's respective Boards of Directors and a pre-acquisition agreement has been entered into.
The agreement provides that Wascana will pay CanadianOxy a break-up fee of 2 percent in certain circumstances. In addition, Wascana has granted to CanadianOxy a right of first refusal with respect to any subsequent offers.
The Offer represents a 25 percent premium to the closing price of Wascana's shares on The Toronto Stock Exchange on February 11, 1997, the day before Talisman Energy Inc. announced a take-over bid for Wascana, and a 13 percent premium to the imputed value of Talisman's offer at the close of markets on March 17, 1997 of $18.13.
The documentation associated with the Offer is expected to be mailed to Wascana's shareholders no later than midnight on March 25, 1997 and the Offer will expire approximately 21 days thereafter. The Offer will be conditional upon 66 2/3 percent of Wascana's shares outstanding being tendered. CanadianOxy will fund the Offer from internal cash flow and the drawdown of committed, long term bank lines. Upon completion of this transaction CanadianOxy's debt will equal approximately 2.5 times pro forma annualized 1997 cash flow. CanadianOxy is committed to aggressive reduction of this debt and expects to be significantly under two times cash flow within two years, without impairing the capital program of either company.
Combined conventional production will total approximately 115,000 barrels of oil equivalent per day in Canada and 264,000 barrels world wide in 1997, making CanadianOxy one of the three largest oil and gas producers based in Canada. Combined land holdings in Western Canada will total approximately 3.6 million acres, one of the largest exploration portfolios in the basin. The two companies have extensive joint and complementary land interests and a large number of drill-ready prospects to pursue for reserves and production growth.
Following completion of the transaction, Wascana will be a wholly owned subsidiary of CanadianOxy and will manage the combined conventional oil and gas assets in Western Canada. The head office of Wascana will remain in Regina and Wascana will continue to comply with the provisions of the Wascana Energy Act. No net loss of jobs in Saskatchewan is contemplated and Wascana will continue its support of Saskatchewan business, education, First Nations and other stakeholders in the Province. Both CanadianOxy and Wascana have capable and talented staff. Overall, the people from both companies will be integrated to create a strong new entity focused on and equipped for growth.
"The assets and people of CanadianOxy and Wascana are an excellent fit. It makes economic and organizational sense to operate our Western Canadian conventional assets as one entity", Mr. Hentschel said.
"This is one of those unique opportunities where all parties come away from this deal with a win. Wascana's shareholders are receiving a fair price that reflects the upside in their company's asset base. CanadianOxy's shareholders will benefit from increased exposure to lower risk Canadian opportunities, a more balanced portfolio and accelerated growth over the coming years."
CanadianOxy is a global energy and chemical producer with core producing operations in Canada, the United States and Yemen. CanadianOxy's shares are listed on the Toronto, Montreal and American stock exchanges under the symbol "CXY".
Wascana is a senior Canadian oil and gas exploration, production and marketing company headquartered in Regina, Saskatchewan. Wascana's shares are listed on the Toronto and Montreal stock exchanges under the symbol "WE".
A conference call has been scheduled for 9:00 AM Mountain Standard Time (10:00 AM Central Standard Time, 11:00 AM Eastern Standard Time) on March 18 to discuss this Offer. Interested parties may connect to this conference by telephoning 1-800-997-6765.
CONTACT: Wascana Energy Inc.
Tim Jeffery, 306/781-8590
Canadian Occidental Petroleum ltd.
Kevin Finn, 403/234-1932
|Printer friendly Cite/link Email Feedback|
|Date:||Mar 18, 1997|
|Previous Article:||1996 Financial Statements for the Tele Danmark Group.|
|Next Article:||Tombtown livens up Web as home of the living impaired; 3-D VR Graveyard fetes expired celebs, aging baby boomers.|