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Oando Plc - Market Update

Release Date: 23/12/2015 12:44:00      Code(s): OAO     
Oando PLC
(Incorporated in Nigeria and registered as an external company in South Africa)
Registration number: RC 6474
(External company registration number: 2005/038824/10)
Share Code on the JSE Limited: OAO
Share Code on the Nigerian Stock Exchange: OANDO
ISIN: NGOANDO00002

OANDO ENERGY RESOURCES ENTERS INTO AGREEMENT WITH OANDO PLC
FOR OANDO PLC TO ACQUIRE OER MINORITY SHARES FOR A CONSIDERATION OF US$1.20
PER SHARE IN CASH

CALGARY, ALBERTA, DECEMBER 22, 2015 - Oando Energy Resources Inc. (?OER? or the
?Company?) (TSX: OER), a company focused on oil and gas exploration and production in
Nigeria, today announced that it has entered into a definitive agreement (the ?Arrangement
Agreement?) with Oando PLC and Oando E&P Holdings Limited, a private company
incorporated under the laws of the Province of British Columbia as a wholly-owned subsidiary
of Oando PLC (the ?Purchaser?), under which the Purchaser would acquire all of the issued
and outstanding common shares of OER (the ?Common Shares?), excluding the Common
Shares held by Oando PLC and those held by M1 Petroleum Ltd., West African Investment Ltd.
and Southern Star Shipping Company Inc. (collectively, the ?Institutional Shareholders?) (such
Common Shares, excluding those of Oando PLC and the Institutional Shareholders being the
?Minority Shares?), pursuant to a plan of arrangement (the ?Plan of Arrangement?) for cash
consideration of US$1.20 per share (the ?Consideration?), subject to the receipt of relevant
lender consent and regulatory approvals.

Oando PLC holds, either directly or indirectly, 746,107,838 of the Common Shares,
representing approximately 93.7% of the issued and outstanding Common Shares. Pursuant
to the Plan of Arrangement, the Purchaser will acquire all of the Common Shares that are held
either directly or indirectly by the Institutional Shareholders and Oando PLC. In consideration
for such transfer, they shall receive such number of shares of the Purchaser as reflects the
number of their contributed Common Shares for the purposes of completing the transactions
contemplated by the Plan of Arrangement.

The Consideration represents a 177.2% premium to the 20-day volume weighted average
price of the Common Shares on the Toronto Stock Exchange for the period ending December
21, 2015, using the Bank of Canada US$ to CDN$ closing exchange rate of 1.3965 on
December 21, 2015. The transaction provides total consideration to holders of Minority
Shares of approximately US$13.7 million and implies an equity value for the Company of
approximately US$955.3 million.

The Board of Directors of OER has unanimously (with Messrs. Tinubu and Boyo abstaining)
determined that the Plan of Arrangement is fair to shareholders (excluding Oando PLC and
the Institutional Shareholders) and it would be in the best interests of the Company to enter
into the Arrangement Agreement.
                                        

The determination of the Board was made upon the recommendation of a special committee
of independent directors (the ?Independent Committee?), and after consideration of the
advice of legal and financial advisors to the Independent Committee and the Company.

Bill Watson, Chairman of the Independent Committee stated ?This proposal represents a
significant premium to the 20 day volume weighted average price of the Common Shares
prior to today?s announcement. We recommend that shareholders vote in favour of the Plan
of Arrangement at the special meeting of shareholders to be held for the purposes of
approving the transaction.?

FirstEnergy Capital Corp. (?FirstEnergy?), which is acting as financial advisor to the
Independent Committee, has provided an opinion to the effect that, as of the date of the
opinion and based upon and subject to the limitations and qualifications therein, the
Consideration to be received by the shareholders (excluding Oando PLC and the Institutional
Shareholders), is fair, from a financial point of view, to the shareholders (excluding Oando PLC
and the Institutional Shareholders). FirstEnergy has also prepared and delivered a formal
valuation of the Common Shares under the supervision of the Independent Committee as
contemplated by Multilateral Instrument 61-101 - Protection of Minority Security Holders in
Special Transactions (?MI 61-101?). FirstEnergy concluded that, subject to the assumptions,
qualifications and limitations provided in the formal valuation, that the fair market value of an
OER common share is in the range of CDN$0.10 to CDN$0.50 as at the date of the formal
valuation. The selection of FirstEnergy as independent valuator, and the assessment of its
qualifications and independence, was made by, and the valuation was prepared under the
supervision of, the Independent Committee.

The implementation of the Plan of Arrangement will be subject to approval by the holders of
the affected securities at a special meeting (the ?Special Meeting?) expected to be held on
February 25, 2016. The implementation of the Plan of Arrangement will be subject to
approval by 662/3% of the votes cast by holders of Common Shares. Although the transaction
will constitute a ?business combination? for the purposes of MI 61-101, an exemption from
the ?majority of the minority? approval is available because Oando PLC holds either directly or
indirectly more than 90% of the Common Shares. Oando PLC is entitled to, and pursuant to
the Arrangement Agreement, covenanted to vote or cause to be voted all Common Shares
that it controls in favour of the special resolution approving the Plan of Arrangement to be
considered at the Special Meeting (the ?Arrangement Resolution?). Accordingly, approval of
the Arrangement Resolution is expected. The transaction also will be subject to applicable
regulatory approvals and certain closing conditions customary in transactions of this nature.

The Arrangement Agreement provides for, among other things, a non-solicitation covenant
on the part of the Company (subject to customary fiduciary out provisions). The Arrangement
Agreement also provides the Purchaser with a ?right to match.?
                                             
The terms and conditions of the proposed transaction will be disclosed in an information
circular that will be mailed in February 2016 to the securityholders of OER. It is anticipated
that the transaction, if approved by OER shareholders and the Court, will be completed by the
end of February 2016. The completion of the transaction is not dependent on any approval
from the optionholders, share unitholders or warrantholders of the Company.

The completion of the Plan of Arrangement will be subject to, among other things, approval
by the syndicate of lenders in OER?s US$450 million senior secured facility.

Cassels Brock & Blackwell LLP and Stikeman Elliott LLP are acting as legal counsel to OER and
the Independent Committee, respectively. Argentil Capital Partners Limited is acting as
financial advisor, and Norton Rose Fulbright LLP is acting as legal counsel, to the Purchaser
and Oando PLC.

Copies of the Arrangement Agreement, the information circular for the Special Meeting and
certain related documents will be filed with Canadian securities regulators and will be
available under the Company?s profile on the Canadian SEDAR website at www.sedar.com.

About Oando Energy Resources Inc. (OER)

OER currently has a broad suite of producing, development and exploration assets in the Gulf
of Guinea (predominantly in Nigeria). Average production for OER in the third quarter of 2015
was 53,169 boe/d.

Cautionary Statement

No stock exchange, securities commission or other regulatory authority has approved or
disapproved the information contained herein.

Forward-looking statements:

This news release contains forward-looking statements and forward-looking information
within the meaning of applicable securities laws. The use of any of the words ?expect?,
?anticipate?, ?continue?, ?estimate?, ?objective?, ?ongoing?, ?may?, ?will?, ?project?, ?should?,
?believe?, ?plans?, ?intends? and similar expressions are intended to identify forward-looking
information or statements. In particular, this news release contains forward-looking
statements relating to intended acquisitions.

Although the Company believes that the expectations and assumptions on which such
forward-looking statements and information are reasonable, undue reliance should not be
placed on the forward-looking statements and information because the Company can give
no assurance that such statements and information will prove to be correct. Since forward-
looking statements and information address future events and conditions, by their very
nature they involve inherent risks and uncertainties.
                                           
Actual results could differ materially from those currently anticipated due to a number of
factors and risks. Forward-looking statements are subject to a variety of risks, uncertainties
and other factors which could cause actual events or results to differ from those expressed or
implied by the forward-looking statements, including, without limitation: the Arrangement
Agreement may be terminated in certain circumstances; general business, economic,
competitive, political, regulatory and social uncertainties; risks related to factors beyond the
control of the Purchaser, Oando PLC or the Company; foreign countries? regulatory
requirements; risks related to certain directors and executive officers of the Company possibly
having interests in the Arrangement Agreement that are different from other Shareholders;
risks that other conditions to the consummation of the Arrangement are not satisfied; global
economic climate; dilution; ability to complete acquisitions; environmental risks; community
and non-governmental actions; and regulatory risks. This list is not exhaustive of the factors
that may affect any of forward-looking statements of the Company. Accordingly, readers
should not place undue reliance on the forward-looking statements.

Additional information on these and other factors that could affect the Company?s financial
results are included in reports on file with applicable securities regulatory authorities and may
be accessed through the SEDAR website (www.sedar.com) under the Company. The forward-
looking statements and information contained in this news release are made as of the date
hereof and the Company undertakes no obligation to update publicly or revise any forward-
looking statements or information, whether as a result of new information, future events or
otherwise, unless so required by applicable securities laws.

For further information:
Pade Durotoye,
CEO,
Oando Energy Resources Inc.,
pdurotoye@oandoenergyresources.com,
+1 403-561-1713.

Tokunboh Akindele,
Head, Investor Relations,
Oando Energy Resources Inc.,
takindele@oandoenergyresources.com,
+1 403-560-7450.


Johannesburg
23 December 2015

Sponsor: Sasfin Capital (a division of Sasfin Bank Limited)

Date: 23/12/2015 12:44:00 Supplied by www.sharenet.co.za                     
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