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Carrick Petroleum Inc. Directors’ Circular Issued – Recommended Insider Bid by Offeror Bidder Group

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS IN THAT JURISDICTION.

CALGARY, Alberta, Oct. 24, 2017 (GLOBE NEWSWIRE) -- Carrick Petroleum Inc. (“Carrick” or the “Company”) announces today that pursuant to a pre-bid agreement (the “Pre-Bid Agreement”) dated September 27, 2017 between the Company and a bidder group represented by Donald Staus, the President, CEO and a director of Carrick (collectively, the “Offeror”) with respect to a cash insider bid for all of the issued and outstanding common shares of the Company (“Common Shares”) not currently owned by the Offeror for $0.03 per share (the “Offer”), the Company will today mail to shareholders of the Company (“Shareholders”) a Directors’ Circular in respect of the Offer.

The Offer is being made by the Offeror, who collectively hold approximately 16.8% of the currently issued and outstanding Common Shares. The Offer represents an opportunity for Shareholders to realize certainty of value and immediate liquidity for their Common Shares. The Offer is considered to be an “insider bid” under applicable Canadian securities laws and is to be completed by way of a takeover bid thereunder. 

The board of directors of the Company excluding Donald Staus as an interested director (collectively, the “Directors”), after receiving the recommendation of the Special Committee (as defined herein) and consulting with its financial and legal advisors, considers the terms of the Offer to be in the best interests of Carrick and Shareholders and accordingly unanimously recommends that Shareholders accept the Offer and deposit their Common Shares.

The determination of the Directors was made upon the recommendation of a special committee of independent Directors (the “Special Committee”), which has been advised by Sayer Energy Advisors (“Sayer”) in its capacity as financial advisor.  Sayer rendered a fairness opinion to the Special Committee, to the effect that as at October 23, 2017, the consideration under the Offer is fair, from a financial point of view, to Shareholders (other than the Offeror). 

Given the Offeror’s existing shareholding in the Company, in accordance with the requirements of Multilateral Instrument 61-101 – Protection of Minority Securityholders in Special Transactions (“MI 61-101”), Sayer has prepared and delivered a valuation of the Common Shares under the supervision of the Special Committee and determined that the Offer is in the range of such valuation.  Sayer concluded that, subject to the assumptions, qualifications and limitations set out in the formal valuation as at July 1, 2017 and rendered October 23, 2017, the fair market value of a Common Shares is in the reasonable range of $0.02 to $0.04 per share.  Details of the formal valuation will be included in the Offer and Circular (as defined herein) as well as the Directors’ Circular that will be mailed to Shareholders.       

The Directors have approved the initial deposit period of 36 days from the date of the Offer.  As such, the Offer will be open for acceptance until 5:00 p.m. (Calgary time) on November 30, 2017 (the “Expiry Time”).  Shareholders wishing to accept the Offer must take action to deposit their shares.

Successful completion of the Offer is conditional upon, amongst other things, more than 50% of the Common Shares outstanding (excluding the shares already owned by the Offeror) being validly deposited under the Offer prior to the Expiry Time (the “Minimum Tender Condition”).  No deposited shares will be purchased by the Offeror if the Minimum Tender Condition is not satisfied. 

The Offeror has today also launched the Offer by mailing the takeover bid circular containing the Offer and other related documents to Shareholders. 

Full details of the Offer are contained in the documents noted above, all of which are available to Shareholders via Carrick’s SEDAR profile at www.sedar.com.

Shareholders should consider the Offer carefully and come to their own conclusions as to whether to accept or reject the Offer. Shareholders who are in doubt as to how to respond should consult with their own investment dealer, stockbroker, bank manager, lawyer, accountant or other professional advisor. Shareholders are advised that acceptance of the Offer may have tax consequences and they should consult their own professional tax advisors.

Take-up and Payment

Take-up and payment for the Common Shares is subject to the Minimum Tender Condition that requires more than 50% of the Common Shares being deposited pursuant to the Offer (excluding Common Shares already owned by the Offeror).  There is no obligation on the Offeror to undertake any form of subsequent acquisition transaction to acquire the remaining Common Shares not deposited, taken-up and paid for.  The transaction is subject to customary closing conditions, including all necessary regulatory approvals.

The Offer is not subject to any financing condition.  As is customary, the Offeror has confirmed that it has sufficient resources available to fund the cash consideration for all the Common Shares acquired pursuant to the Offer with such funds being deposited in escrow pursuant to the terms and conditions of an escrow agreement. 

The Pre-Bid Agreement, as more fully described in the Offer and Circular as well as Directors’ Circular, provides for, among other things, a customary support condition by the Directors and non-interested officers of the Company, a non-solicitation covenant in respect of any competing offers from third parties, a “right to match” provision for the Offeror and a provision which provides for the payment by the Company to the Offeror of a $75,000 break fee in the event that the Pre-Bid Agreement terminates in certain circumstances.   

Reasons to Accept the Offer    

In reaching its unanimous recommendation to Shareholders to accept the Offer, the Directors evaluated multiple factors, including: liquidity and certainty of value; the Offer being a cash offer without financing condition; a strategic alternatives review and marketing process undertaken by Carrick (please refer to the Directors’ Circular for further details) prior to the Offer being proposed and the Offer being determined to be superior to proposals pursuant to such process; lock-up agreements being in place with all Directors and non-interested officers representing 16% of Carrick’s issued and outstanding Common Shares; a fairness opinion and valuation of Sayer Energy Advisors; response to superior proposals permitted (subject to termination fee in certain circumstances); and no preclusion of the Directors continuing to act in accordance with their fiduciary duties.  Shareholders are urged to carefully review the Directors’ Circular for additional details pertaining to each of the foregoing factors along with other factors considered along with a summary of pros and cons to the Offer and all other information contained in the Directors’ Circular.       

Information on Depositing your Shares 

The Offeror has engaged Computershare Trust Company of Canada to act as depositary (the “Depositary”) for the Offer.  If assistance is required with depositing your shares, the Depositary can be contacted as follows:  (a) if by mail: Computershare Investor Services Inc., P.O. Box 7021, 31 Adelaide St E, Toronto, Ontario M5C 3H2, Attention: Corporate Actions; (b) if by hand, courier or by registered mail: Computershare Investor Services Inc., 8th Floor, 100 University Avenue, Toronto, Ontario M5J 2Y1, Attention: Corporate Actions; (c) Toll Free (North America): 1-800-564-6253; (d) Outside North America: 1-514-982-7555; and (e) via E-Mail: corporateactions@computershare.com.

Carrick Contact Information

Carrick Petroleum Inc.
Suite 420, 333 5th Avenue SW, Calgary, Alberta T2P 3B6
Attention: Stewart Larsen, Vice President Finance and CFO
Tel. 1-403-263-5055

Forward-Looking Statements

This announcement may contain certain forward-looking statements related to the Company, including anticipated future events and circumstances, including in particular, but not limited to, statements relating to the Offer, satisfaction of the conditions to the Offer including the Minimum Tender Condition, and the acquisition by the Offeror of more than 50% of the outstanding Common Shares of the Company not already owned by the Offeror. Forward-looking information is based on the estimates, beliefs and assumptions of the Directors and management of the Company regarding the markets in which the Company operates.  In some cases, forward-looking information may be identified by words such as “anticipate”, “believe”, “could”, “expect”, “plan”, “seek”, “may”, “intend”, “will”, “forecast” and similar expressions. 

Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from any future results expressed or implied by such forward-looking statements, including the risk that all conditions of the Offer will not be satisfied.  Many of these risks and uncertainties relate to factors that are beyond the Company’s ability to control or estimate precisely, and include, but are not limited to, failure to satisfy the conditions to the Offer as described in the Offer and Offeror's take-over bid circular dated October 24, 2017 (“Offer and Circular”), failure to successfully implement the transaction in the time period anticipated, actions taken by Shareholders in respect of the Offer, the termination of the Pre-Bid Agreement (as defined and described in the Offer and Circular) in accordance with the provisions thereof, the decision or ability of the Offeror to complete a Compulsory Acquisition or Subsequent Acquisition Transaction (each as defined in the Offer and Circular), costs incurred by the Company in connection with the Offer and in the event of any Compulsory Acquisition or Subsequent Acquisition Transaction, absence of a material adverse change of the financial condition, business or results of operations of the Company, changes in general economic conditions, changes in industry conditions, the financial markets, the effects of competition in the markets where the Company operates, changes in and effects of laws, regulators, governmental policies and actions of third persons. These are not necessarily all of the factors that could cause actual results to differ materially from those expressed in any of the Company’s forward-looking statements. Other unknown and unpredictable factors could also impact results.  The Company cannot give any assurance that such forward-looking statements will prove to have been correct.  The reader is cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this announcement.  The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

This press release does not constitute an offer to sell or the solicitation of any offer to buy any securities or a solicitation of any vote or approval.  Such an offer may only be made pursuant to an officer and takeover bid circular filed with applicable securities regulatory authorities in Canada and pursuant to registration or qualification under the securities laws of any other applicable jurisdiction.  The distribution of this press release in or into certain jurisdictions may be restricted by law and therefore persons into whose possession this press release comes should inform themselves about, and observe, such restrictions.  Any failure to comply with the restrictions may constitute a violation of the securities law of any such jurisdiction. 

This material is not a substitute for the Offer and Circular or the Directors’ Circular which will be filed with the applicable securities regulatory authority in Canada regarding the proposed transaction or for any other document which the Company or the Offeror may file with applicable securities regulators and send to Shareholders in connection with the Offer.  SECURITY HOLDERS OF CARRICK ARE URGED TO READ ANY SUCH DOCUMENTS CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE OFFER.  The offer and takeover bid circular and the Directors’ Circular, along with related documents, will also be available under the SEDAR profile of Carrick on www.sedar.com.