MFC Industrial (MIL) to Acquire Compton Petroleum for $1.25/Share
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MFC Industrial Ltd. (NYSE: MIL) has entered into a support agreement (the "Support Agreement") with Compton Petroleum Corporation ("Compton") to acquire all of the issued and outstanding common shares of Compton (the "Compton Shares") by way of a take-over bid (the "Offer"), for cash consideration of $1.25 per Compton Share, representing total aggregate consideration of approximately $33.0 million. All dollar amounts referenced herein are in Canadian dollars.
The Offer is to be made pursuant to a take-over bid circular and related documents to be mailed to Compton shareholders in accordance with applicable laws (subject to the terms and conditions of the Support Agreement). The Offer will be open for acceptance for a period of not less than 35 days from its commencement and may be extended from time to time. The Offer will be subject to customary conditions, including, among other things, there being deposited under the Offer, and not withdrawn at the expiry date, at least 66.67% of the Compton Shares, receipt of requisite regulatory and contractual consents and the absence of a material adverse change with respect to Compton.
The board of directors of Compton, after consulting with its financial and legal advisers, has unanimously approved entering into the Support Agreement and unanimously recommends that Compton shareholders tender to the Offer.
n addition, MFC has entered into lock-up agreements (the "Lock-up Agreements") with shareholders of Compton holding, directly or indirectly, approximately 54% of the outstanding Compton Shares, pursuant to which they each agreed to tender, or cause to be tendered, all of their Compton Shares to the Offer. Concurrently with the execution of the Support Agreement, MFC has agreed to purchase 6,548,498 special warrants (the "Warrants") from Compton at a price of $1.25 per Warrant (the "Warrant Placement"). Each Warrant is convertible into a Common Share on a one-for-one basis at the option of MFC. The Warrants are also redeemable, at the option of MFC and prior to conversion, at their subscription price upon the occurrence of certain events. The Common Shares underlying the Special Warrants represent approximately 19.9% of the outstanding Compton Shares on a post-conversion basis. Proceeds from the exercise of the Warrants will be utilized by Compton to pay down its current bank facility. Compton has received conditional approval of the Warrant Placement from the Toronto Stock Exchange (the "TSX"). Compton has satisfied TSX shareholder approval requirements for the issuance of the Warrants by obtaining consent and authorization of the issuance of the Warrants from holders of more than 50% of the issued and outstanding Compton Shares.
Sangra Moller LLP is acting as legal counsel to MFC in connection with the transaction.
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The Offer is to be made pursuant to a take-over bid circular and related documents to be mailed to Compton shareholders in accordance with applicable laws (subject to the terms and conditions of the Support Agreement). The Offer will be open for acceptance for a period of not less than 35 days from its commencement and may be extended from time to time. The Offer will be subject to customary conditions, including, among other things, there being deposited under the Offer, and not withdrawn at the expiry date, at least 66.67% of the Compton Shares, receipt of requisite regulatory and contractual consents and the absence of a material adverse change with respect to Compton.
The board of directors of Compton, after consulting with its financial and legal advisers, has unanimously approved entering into the Support Agreement and unanimously recommends that Compton shareholders tender to the Offer.
n addition, MFC has entered into lock-up agreements (the "Lock-up Agreements") with shareholders of Compton holding, directly or indirectly, approximately 54% of the outstanding Compton Shares, pursuant to which they each agreed to tender, or cause to be tendered, all of their Compton Shares to the Offer. Concurrently with the execution of the Support Agreement, MFC has agreed to purchase 6,548,498 special warrants (the "Warrants") from Compton at a price of $1.25 per Warrant (the "Warrant Placement"). Each Warrant is convertible into a Common Share on a one-for-one basis at the option of MFC. The Warrants are also redeemable, at the option of MFC and prior to conversion, at their subscription price upon the occurrence of certain events. The Common Shares underlying the Special Warrants represent approximately 19.9% of the outstanding Compton Shares on a post-conversion basis. Proceeds from the exercise of the Warrants will be utilized by Compton to pay down its current bank facility. Compton has received conditional approval of the Warrant Placement from the Toronto Stock Exchange (the "TSX"). Compton has satisfied TSX shareholder approval requirements for the issuance of the Warrants by obtaining consent and authorization of the issuance of the Warrants from holders of more than 50% of the issued and outstanding Compton Shares.
Sangra Moller LLP is acting as legal counsel to MFC in connection with the transaction.
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