Source: http://bigdata.sys-con.com/node/2560916
Timestamp: 2013-05-23 19:41:08
Document Index: 190740884

Matched Legal Cases: ['ART 26', 'art 26', 'art 26', 'art 26', 'art 26', 'art\n26', 'art 28']

Presentation re Ithaca Offer for Valiant Petroleum plc | Big Data Journal
Presentation re Ithaca Offer for Valiant Petroleum plc By Marketwire .
March 1, 2013 05:06 AM EST
ABERDEEN, SCOTLAND -- (Marketwire) -- 03/01/13 -- CIO, CTO & Developer Resources
Ithaca Offer for Valiant Petroleum plc
Recommended Offer by the Board of Valiant Petroleum plc
Ithaca Energy Inc. (the "Company") (TSX: IAE, LSE AIM: IAE) announces
that it has reached agreement on the terms of a recommended acquisition
under which Ithaca Energy Holdings (UK) Limited, a wholly-owned
subsidiary of the Company, will acquire the entire issued and to be
issued share capital of Valiant Petroleum plc (the "Acquisition").
A presentation summarising the Acquisition is available on the
Company's website, www.ithacaenergy.com, and the terms and conditions
of the Acquisition are described in the announcement issued pursuant to
Rule 2.7 of the City Code on Takeovers and Mergers in the United
Kingdom, a copy of which is attached hereto.
activities on the United Kingdom Continental Shelf. The Company's
strategy is centred on building a highly profitable North Sea oil and
gas company by maximising production and cash flow from its existing
assets, the appraisal and development of existing discoveries on
properties held by the Company and the delivery of additional growth
via acquisitions and licence round participation.
the Acquisition or otherwise, are intended to identify forward-looking
subject to known and unknown risks and uncertainties and other factors
anticipated in such forward-looking statements or information. These
announcement. Ithaca Energy Inc. expressly disclaims any obligation or
forward-looking statement contained herein to reflect any change in its
DIRECTLY OR INDIRECTLY IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO
SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF
ITHACA ENERGY HOLDINGS (UK) LIMITED
(A WHOLLY-OWNED SUBSIDIARY OF ITHACA ENERGY INC.)
(TO BE EFFECTED BY MEANS OF A SCHEME OF ARRANGEMENT UNDER PART 26 OF
* The Boards of Ithaca Energy Inc. ("Ithaca") and of Valiant
Petroleum plc ("Valiant") are pleased to announce that they have
reached agreement on the terms of a recommended acquisition under which
Ithaca Energy Holdings (UK) Limited ("Ithaca Bidco") will acquire the
entire issued and to be issued share capital of Valiant (the"Acquisition").
The Acquisition is to be effected by means of a
Court-sanctioned scheme of arrangement under Part 26 of the Companies
* Under the terms of the Acquisition, Valiant Shareholders will be
entitled to receive 307 pence in cash and 1.33 Ithaca Consideration
Shares for each Valiant Share held at the Scheme Record Time.
* Based on the Closing Price of an Ithaca Share of C$1.97 (126
pence) on 28 February 2013, the Acquisition values the entire issued
and to be issued share capital of Valiant at approximately GBP203
million (equivalent to approximately US$309 million and C$318 million)
and each Valiant Share at approximately 475 pence.
* The consideration payable under the Acquisition represents a
premium of approximately:
- 37% to the Closing Price of 346.5 pence per Valiant Share on 28
February 2013, the last Business Day prior to the date of this
- 31% to the average Closing Price of 361.1 pence per Valiant Share
for the 20 Business Days ended on 28 February 2013, the last Business
Day prior to the date of this announcement; and
- 3% to the Closing Price of 460.0 pence per Valiant Share on 5
September 2012, the last Business Day prior to the announcement by
Valiant of the commencement of a 'formal sale process' as defined in
* The Valiant Board, which has been so advised by Morgan Stanley &amp;
Co. Limited ("Morgan Stanley", as the independent financial adviser for
the purposes of Rule 3 of the Code), considers the terms of the
Acquisition to be fair and reasonable. In providing its advice to the
Valiant Board, Morgan Stanley has taken into account the commercial
assessments of the Valiant Board.
* Accordingly, the Valiant Board intends to recommend that Valiant
Court Meeting and the General Meeting which are to be convened to
approve the Acquisition. The Valiant Directors have irrevocably
undertaken to approve the Acquisition in respect of their own
beneficial holdings in Valiant, which amount in aggregate to 433,695
Valiant Shares, representing approximately 1.06% of the entire issued
share capital of Valiant (as described in Appendix III). These
irrevocable undertakings do not lapse in the event of a higher
competing offer being made for Valiant. As previously announced by
Valiant on 15 November 2012, Peter Buchanan has ceased to participate
in meetings of the Valiant Board relating to the Strategic Review and
formal sale process initiated on 6 September 2012, including relating
to the Acquisition and has not given an irrevocable undertaking.
* In aggregate, Ithaca Bidco has received irrevocable undertakings
and non-binding letters of intent to vote in favour of the Scheme and
the resolutions at the Court Meeting and the General Meeting in respect
of 16,930,479 Valiant Shares, representing approximately 41.35% of
Valiant's issued share capital. Further details of these irrevocable
undertakings and letters of intent are set out at paragraph 7 and
Appendix III to this announcement.
* In addition, although no shareholder approval of Ithaca or Ithaca
Bidco is required in connection with the Acquisition, Ithaca Bidco has
received non-binding letters from the following Ithaca shareholders (or
investment managers), confirming their support for Ithaca and Ithaca
Bidco making the Acquisition in line with Ithaca's stated strategy:
Artemis Investment Management LLP; Four Capital Partners Limited; HSBC
Global Asset Management; JP Morgan Asset Management (UK) Limited;
Salida Capital; and SLZ Capital Management, LLC.
* Ithaca, through its wholly-owned subsidiary, Ithaca Energy (UK)
Limited, is an oil and gas operator focused on production, appraisal
and development activities in the North Sea. Ithaca's strategy is to
grow shareholder value by building a highly cash-generative North Sea
oil and gas Business. Execution of the strategy is centred on:
maximising cash flow and production from existing assets; delivering
material growth by appraising and developing existing hydrocarbon
discoveries; and continuing to increase and diversify Ithaca's
portfolio and cash flows via acquisitions. The Ithaca Shares are listed
on the Toronto Stock Exchange and admitted to trading on AIM, a market
operated by the London Stock Exchange. Ithaca Bidco is a wholly-owned
subsidiary of Ithaca incorporated under the laws of Scotland for the
purpose of making the Acquisition. Ithaca Bidco has not traded since
incorporation, nor has it entered into any obligations, other than in
* Valiant has a balanced portfolio of production, development and
exploration assets with a primary focus on the UK and Norway. Formed in
2004, Valiant has developed a stable production foundation providing it
with sustained cash flows which fund on-going investment. Valiant has
built a broad and attractive portfolio in stable geographies where it
has deep knowledge of the geology and regulatory environment.
* The announcement of this recommended Acquisition follows the
announcement by Valiant on 6 September 2012 that it had decided to
launch a 'Strategic Review' in the context of a 'formal sale process'
as defined in the Code, which process has now been successfully
concluded with the announcement of this recommended Acquisition. The
end of the formal sale process means that the data room which has been
open to participants will be closed with effect from 7.00 a.m. on 1
March 2013. Other potential offerors can still nonetheless announce
competing offers for Valiant.
* The Acquisition is anticipated to result in:
- the establishment of Ithaca as a leading mid cap North Sea oil and
gas operator, with 2P reserves of approximately 74MMboe(1), of which
approximately 50% relates to currently producing assets;
- a more than doubling of Ithaca's current forecast 2013 production
to 14-16kboe/d (90% oil), rising to approximately 27kboe/d in 2015; and
- approximately a four fold increase in Ithaca's anticipated 2013
cash flow from operations to US$400 million, rising to over US$700
* Ithaca is pleased to confirm that, on completion of the
Acquisition, two existing Valiant Directors, Mr Jannik Lindbaek and Mr
Michael Bonte-Friedheim, will be appointed to the Board of Ithaca as
Non-Executive Directors. Both Mr Lindbaek and Mr Bonte-Friedheim have
considerable oil and gas industry experience, both in the North Sea and
internationally, and will be central to ensuring a seamless and
efficient integration of Valiant's assets into Ithaca's existing
operations. Mr Lindbaek was previously Chairman of the Norwegian
international oil and gas company Statoil ASA, prior to its merger with
Norsk Hydro in 2007. Mr Bonte-Friedheim, an investment banker by
background, was previously Non-Executive Chairman and subsequently CEO
of Mediterranean Oil and Gas plc, a UK AIM-traded company, and is
currently co-CEO of NextEnergy Capital, a merchant bank focused on the
renewable energy sector, as well as acting CEO of Valiant.
* The Ithaca Consideration Shares to be issued pursuant to the
Acquisition are expected to represent approximately 18% of the issued
share capital of Ithaca as enlarged by the Acquisition.
* The Ithaca Consideration Shares will rank equally in all respects
with the existing Ithaca Shares and will be entitled to all dividends
and/or other distributions declared or paid by Ithaca in respect of
common shares of Ithaca by reference to a record date falling after the
* The cash consideration payable under the terms of the Acquisition
will be funded from a bridge credit facility provided to Ithaca Bidco
by Banc of America Securities Limited, BNP Paribas and The Bank of Nova
Scotia, together with Ithaca's existing cash resources.
* The Panel has consented to Valiant entering into a break fee
arrangement with Ithaca Bidco as a participant in Valiant's announced
formal sale process under Note 2 of Rule 21.2 of the Code. As such,
Valiant has agreed to pay Ithaca Bidco a break fee of GBP2,034,944
(subject to adjustment for VAT) if a Competing Offer is announced prior
to the Acquisition lapsing or being withdrawn and such Competing Offer
becomes or is declared unconditional in all respects or otherwise
* The Acquisition is conditional on, among other things, certain
regulatory approvals and the sanction of the Scheme by the Court. The
Acquisition is also conditional upon a Brent Failure Event not having
occurred. In addition, in order to become Effective, the Scheme must be
approved by a majority in number of Scheme Shareholders voting at the
Court Meeting representing not less than 75% in value of the Scheme
Shares held by the Scheme Shareholders present and voting in person or
by proxy. It is currently expected that the Scheme Document, containing
further information about the Acquisition and notices of the Court
Meeting and the General Meeting, together with the Forms of Proxy, will
be posted on or around 12 March 2013 and that, subject to the
satisfaction, or where relevant, waiver of all relevant Conditions
(including regulatory clearances), the Scheme is expected to become
Effective on or around 19 April 2013.
Commenting on the Acquisition, Jack Lee, Non-Executive Chairman of
Ithaca said:"This proposed acquisition represents a significant step
execution of Ithaca's strategy to build a highly profitable 25kboe/d
North Sea oil and gas company. The combined assets of the two groups
have a strong strategic fit, with the acquisition materially increasing
and broadening Ithaca's producing asset base and reserves portfolio.
The highly cash generative nature of the enlarged portfolio and further
enhancement of Ithaca's existing financial strength provides an
exciting springboard from which to continue driving forward the
Business and accelerating value from Ithaca's production and
development-led growth strategy.
I am also delighted to announce that as part of the acquisition, Ithaca
will be further strengthening its Board of Directors with the addition
of two of Valiant's existing Non-Executive Directors, Mr Jannik Lindbaek
and Mr Michael Bonte-Friedheim. Jannik and Michael are two extremely
experienced oil and gas industry executives, who bring both a wealth of
North Sea knowledge and will be central to ensuring a seamless and
efficient integration."
Commenting on the Acquisition, Kevin Lyon, Non-Executive Chairman of
Valiant said:"We are pleased to announce Ithaca's recommended offer to our
shareholders. The Board feels the offer recognises the value in
Valiant's portfolio and provides our shareholders with the opportunity
to both realise a proportion of this value in cash today whilst
retaining exposure to the enlarged portfolio. The combination with
Ithaca will create a leading North Sea oil and gas operator with a
diverse production and reserves asset base from which to pursue new and
our employees, staff and partners whose hard work and dedication have
helped build Valiant over the past nine years into a full-cycle E&amp;P
company with a portfolio of licences across four countries."
announcement. Appendix I to this announcement contains the conditions
to, and certain further terms of, the Acquisition. Appendix II to this
announcement contains further details of the sources of information and
bases of calculations set out in this announcement. Appendix III
contains a summary of the irrevocable undertakings and letters of
intent given by the Valiant Directors and by certain institutional
shareholders. Appendix IV contains definitions of certain expressions
used in this summary and in this announcement.
Iain McKendrick,
Chief Executive Officer                   +44 (0) 1224 650 261
Graham Forbes, Chief Financial Officer    +44 (0) 1224 652 151
Cenkos Securities plc (Financial Adviser, Nominated Adviser and Broker
to Ithaca)
Jon Fitzpatrick                           +44 (0) 207 397 8900
Neil McDonald                             +44 (0) 131 220 6939
Joe Nally (Corporate Broking)             +44 (0) 207 397 8900
Billy Clegg                               +44 (0) 207 269 7157
Edward Westropp                           +44 (0) 207 269 7230
Georgia Mann                              +44 (0) 207 269 7212
Kevin Lyon, Non-Executive Chairman        +44 (0) 1483 755 666
Michael Bonte-Friedheim, Acting Chief Executive Officer and
Ian Hart                                  +44 (0) 207 425 8000
Patrick Handley                           +44 (0) 207 404 5959
Michael Shaw                              +44 (0) 207 710 7600
Chris Zeal                                +44 (0) 207 029 8000
The Acquisition will be made on the terms and subject to the conditions
and further terms set out herein and in Appendix I to this announcement
and the further terms and conditions to be set out in the Scheme
Document and Forms of Proxy when issued. The bases and sources of
certain financial information contained in this announcement are set
out in Appendix II to this announcement. A summary of the irrevocable
undertakings given by the Valiant Directors and the irrevocable
undertakings and letters of intent given by certain other Valiant
Shareholders is contained in Appendix III to this announcement. Certain
terms used in this announcement are defined in Appendix IV to this
part of, any offer to sell or subscribe for or an invitation to
vote or approval in any jurisdiction pursuant to the Acquisition or
securities of Valiant or Ithaca in any jurisdiction in contravention of
applicable law. This announcement does not constitute a prospectus or a
prospectus equivalent document.
Any vote by Valiant Shareholders in respect of the Acquisition should
only be made on the basis of the information contained in the Scheme
Document, which will contain the full terms and conditions of the
Acquisition (including details of how to vote in favour of the Scheme).
Valiant Shareholders are advised to read the formal documentation in
relation to the Acquisition which will be distributed to Valiant
Shareholders in due course (with the exception of certain Valiant
Shareholders in Restricted Jurisdictions), as it will contain important
Please be aware that addresses, electronic addresses and certain other
information provided by Valiant Shareholders, persons with information
rights and other relevant persons in connection with the receipt of
communications from Valiant may be provided to Ithaca during the offer
period as required under Section 4 of Appendix 4 to the Code.
Cenkos, which is authorised and regulated in the United Kingdom by the
FSA, is acting for Ithaca and Ithaca Bidco and no-one else in
connection with the Acquisition and will not be responsible to anyone
other than Ithaca and Ithaca Bidco for providing the protections
afforded to clients of Cenkos nor for providing advice in relation to
the Acquisition. Neither Cenkos nor any of its subsidiaries, branches
or affiliates owes or accepts any duty, liability or responsibility
whatsoever (whether direct or indirect, whether in contract, in tort,
under statute or otherwise) to any person who is not a client of Cenkos
in connection with this announcement, any statement contained herein or
otherwise. In addition, in accordance with, and to the extent permitted
by, the Code, normal UK market practice and Section 14(e) of, and
Regulation 14E under, the US Securities Exchange Act of 1934, as
amended (the "Exchange Act") subject to the exemptions provided by Rule
14d-1 under the Exchange Act, Cenkos will continue to act as exempt
principal traders in Valiant Shares and Ithaca Shares on the London
Stock Exchange and engage in certain other purchasing activities
consistent with their respective normal and usual practice and
Scotia Capital Inc is acting for Ithaca and Ithaca Bidco and no-one
else in connection with the Acquisition and will not be responsible to
anyone other than Ithaca and Ithaca Bidco for providing the protections
afforded to clients of Scotia Capital Inc nor for providing advice in
relation to the Acquisition. Neither Scotia Capital Inc nor any of its
subsidiaries, branches or affiliates owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any person
who is not a client of Scotia Capital Inc in connection with this
Morgan Stanley, which is authorised and regulated in the United Kingdom
by the FSA, is acting for Valiant and no-one else in connection with
the Acquisition and will not be responsible to anyone other than
Valiant for providing the protections afforded to clients of Morgan
Stanley or for providing advice in relation to the Acquisition. Neither
Morgan Stanley nor any of its subsidiaries, branches or affiliates owes
or accepts any duty, liability or responsibility whatsoever (whether
direct or indirect, whether in contract, in tort, under statute or
otherwise) to any person who is not a client of Morgan Stanley in
Oriel, which is authorised and regulated in the United Kingdom by the
FSA, is acting for Valiant and no-one else in connection with the
Acquisition and will not be responsible to anyone other than Valiant
for providing the protections afforded to clients of Oriel nor for
providing advice in relation to the Acquisition. Neither Oriel nor any
of its subsidiaries, branches or affiliates owes or accepts any duty,
who is not a client of Oriel in connection with this announcement, any
Jefferies Hoare Govett, a division of Jefferies International Limited,
which is authorised and regulated in the United Kingdom by the FSA, is
acting for Valiant and no-one else in connection with the Acquisition
and will not be responsible to anyone other than Valiant for providing
the protections afforded to clients of Jefferies Hoare Govett or for
providing advice in relation to the Acquisition. Neither Jefferies
Hoare Govett nor any of its subsidiaries, branches or affiliates owes
otherwise) to any person who is not a client of Jefferies Hoare Govett
The availability of the Ithaca Consideration Shares in, and the
release, publication or distribution of this announcement in or into,
jurisdictions other than the United Kingdom may be restricted by law
and therefore persons into whose possession this announcement comes who
are not resident in the United Kingdom should inform themselves about,
and observe, any applicable restrictions. Valiant Shareholders who are
in any doubt regarding such matters should consult an appropriate
independent adviser in the relevant jurisdiction without delay. Any
failure to comply with such restrictions may constitute a violation of
English law and the Code and the information disclosed may not be the
same as that which would have been disclosed if this announcement had
been prepared in accordance with the laws of jurisdictions outside the
The Acquisition relates to the shares of an English company (a "foreign
private issuer" as defined under Rule 3b-4 under the Exchange Act) and
is proposed to be made by means of a scheme of arrangement provided for
under, and governed by, English law. Neither the proxy solicitation
rules nor the tender offer rules under the Exchange Act will apply to
the Scheme. Accordingly, the Ithaca Consideration Shares to be issued
pursuant to the Scheme have not been and will not be registered under
the US Securities Act of 1933 (as amended) (the "Securities Act") or
under the relevant securities laws of any state or territory or other
jurisdiction of the United States, but are expected to be offered in
the United States in reliance upon the exemption from the registration
requirements of the Securities Act provided by Section 3(a)(10) thereof
and exemptions provided under the laws of each state of the United
States in which eligible Valiant Shareholders may reside.
The Scheme will be subject to the disclosure requirements and practices
applicable in the UK to schemes of arrangement, which differ from the
disclosure requirements of the US and Canadian proxy solicitation rules
and tender offer rules. However, if Ithaca Bidco were to elect (in
accordance with the condition in paragraph (a) of Part B of Appendix I)
to implement the Acquisition by means of a Takeover Offer, such offer
will be made in compliance with the US and Canadian tender offer rules,
to the extent applicable, or an exemption therefrom.
Financial information included in this announcement and the Scheme
Document has been or will be prepared in accordance with accounting
standards applicable in the UK and may not be comparable to financial
information of US and Canadian companies or companies whose financial
accounting principles in the United States and Canada.
None of the securities referred to in this document have been approved
or disapproved by the US Securities and Exchange Commission, any state
securities commission in the United States or any other US regulatory
authority, nor have such authorities passed upon or determined the
adequacy or accuracy of this document. Any representation to the
contrary is a criminal offence in the United States. This document does
not constitute an offer to sell, or the solicitation of any offer to
buy, any Ithaca Consideration Shares in any jurisdiction in which such
Valiant is incorporated under the laws of England and Wales, Ithaca
Bidco is organised under the laws of Scotland, and Ithaca is organised
under the laws of Alberta, Canada. Some or all of the officers and
directors of Valiant, Ithaca Bidco and Ithaca may be residents of
countries other than the United States. It may not be possible to sue
Valiant, Ithaca Bidco and Ithaca in a non-US court for violations of US
securities laws. It may be difficult to compel Valiant, Ithaca Bidco,
Ithaca and their respective affiliates to subject themselves to the
jurisdiction and judgment of a US court.
In accordance with normal UK practice and pursuant to Rule 14e-5(b) of
the Exchange Act, Ithaca Bidco or its nominees, or its brokers (acting
as agents), may from time to time make certain purchases of, or
arrangements to purchase Valiant Shares outside of the United States,
other than pursuant to the Acquisition, until the Effective Date,lapses or
is otherwise withdrawn. These purchases may occur either in
the open market at prevailing prices or in private transactions at
negotiated prices. Any information about such purchases will be
disclosed as required in the UK, will be reported to the Regulatory
Information Service of the London Stock Exchange and will be available
on the London Stock Exchange website at
http://www.londonstockexchange.com/exchange/news/market-news/
market-news-home.html. This information will also be publicly disclosed
in the United States to the extent that such information is made public
The Ithaca Consideration Shares to be issued pursuant to the Scheme
have not been and will not be registered under the relevant securities
laws of Japan and the relevant clearances have not been, and will not
be, obtained from the securities commission or similar regulatory
authority of any province or territory of Canada or Australia.
Accordingly, the Ithaca Consideration Shares are not being, and may not
be, offered, sold, resold, delivered or distributed, directly or
indirectly in or into the Canada, Australia or Japan or any other
jurisdiction if to do so would constitute a violation of relevant laws
of, or require registration thereof in, such jurisdiction (except
pursuant to an exemption, if available, from any applicable
registration or prospectus requirements or otherwise in compliance with
all applicable laws). No prospectus in relation to the Ithaca
Consideration Shares has been, or will be, lodged or filed with, or
registered by, the securities commission or similar regulatory
authority of any province or territory of Canada or the Australian
Securities and Investments Commission.
will be issued in reliance upon exemptions from the prospectus
that constitute "control distributions", Ithaca Consideration Shares
may be resold in each province and territory in Canada, subject in
certain circumstances, to the usual conditions that no unusual effort
has been made to prepare the market or to create demand, no
extraordinary commission or consideration is paid and, if the selling
shareholder is an insider or officer of Ithaca, such shareholder has no
reasonable grounds to believe that Ithaca is in default of securities
belief and current expectations of Ithaca, Ithaca Bidco and Valiant or
their directors or officers with respect to various matters. When used
in this announcement, the words "anticipate", "continue",
"estimate","expect", "may", "will", "project", "plan", "should",
"believe","could", "target" and similar expressions, and the negatives
whether used in connection with operational activities, production
forecasts, budgetary figures contained in this announcement or
otherwise, are intended to identify forward-looking statements.
This announcement contains certain forward-looking statements which are
based on internal expectations, estimates, projections and beliefs,
including assumptions regarding Ithaca Bidco's and Valiant's plans,
objectives and expected performance. Such statements relate to events
and depend on circumstances that will occur in the future and are
subject to risks, uncertainties and assumptions. There are a number of
factors which could cause actual results and developments to differ
statements including, among others, the enactment of legislation or
regulation that may impose costs or restrict activities; the
re-negotiation of contracts or licences; fluctuations in demand and
pricing in the oil and gas industry; fluctuations in exchange controls;
changes in government policy and taxation; industrial disputes; war and
terrorism. These forward-looking statements speak only as at the date
In the view of Ithaca's, Ithaca Bidco's and Valiant's management, this
information was prepared by management on a reasonable basis, reflects
the best currently available estimates and judgements, and presents, to
the best of management's knowledge and belief, the expected course of
action and the expected future performance of Ithaca, Ithaca Bidco and
Valiant. However, this information is not fact and should not be relied
upon as being necessarily indicative of future results, and recipients
of this announcement are cautioned not to place undue reliance on this
information. Ithaca, Ithaca Bidco and Valiant do not undertake any
obligation to publicly update or revise any forward-looking statement
or information, except as required by applicable laws.
estimates and assumptions, that the reserves described can be
profitably produced in the future. Many of these risk factors, other
specific risks, uncertainties and material assumptions are discussed in
further detail throughout Ithaca's annual information form and
management's discussion and analysis for the year ended 31 December
2011. Readers are specifically referred to the risk factors described
in the annual information form under "Risk Factors" and in other
documents Ithaca files from time to time with securities regulatory
authorities. Copies of these documents are available without charge
from Ithaca or electronically on the internet on Ithaca's SEDAR profile
No statement in this announcement is intended as a profit forecast or
profit estimate and no statement in this announcement should be
interpreted to mean that the future earnings per share of the Ithaca
Group as enlarged by the Acquisition, Ithaca and/or Valiant for current
or future financial years will necessarily match or exceed the
historical or published earnings per share of Ithaca or Valiant.
References herein to "boe" mean barrels of oil equivalent derived by
converting gas to oil in the ratio of six thousand cubic feet (Mcf) of
gas to one barrel (bbl) of oil. Boe may be misleading, particularly if
an energy conversion method primarily applicable at the burner tip and
Note regarding oil and gas disclosure (1)
With respect to Ithaca's reserves, the figures are derived from a
report prepared by Sproule International Limited ("Sproule"), an
independent qualified reserves evaluator, evaluating the reserves of
Ithaca as of 31 December 2011 and forming the basis for the Statement
of Reserves Data and Other Oil and Gas Information of Ithaca dated 28
March 2012 (the "Statement"). The reserves for the South West Heather
Field included in the Statement are those estimated by Ithaca and
reviewed by Sproule. In respect of the MacCulloch field only
(representing 1.4 MMboe proved plus probable reserves as at the same
effective date, with Ithaca's previously announced acquisition of such
field interest anticipated to be completed in Q1-2013), Ithaca
management prepared information reviewed by a qualified person under
AIM guidelines. With respect to Valiant reserves, the figures are
derived from an Audit of Certain Reserves as at 31 December 2012
prepared by RPS Energy Consultants Limited, an independent qualified
reserves evaluator, dated 24 January 2013. The reserves estimates of
Ithaca are based on the Canadian Oil and Gas Evaluation Handbook
("COGEH") pursuant to Canadian National Instrument 51-101 Standards of
Disclosure for Oil and Gas Activities. The reserves estimates of
Valiant are based on the 2007 SPE /AAPG/WPC/SPEE Petroleum Resource
Management System which is not materially different from COGEH. The
Ithaca reserves correspond to those in the Statement adjusted to
reflect the increased Carna and Cook field equities acquired following
the date of issue of the Statement and Ithaca management's estimate of
MacCulloch field reserves. The Valiant reserves have been adjusted to
reflect the increased Fionn field interest being transferred to Valiant
by Antrim Resources (N.I.) Limited.
more of any class of relevant securities of Valiant or of any paper
offeror (being any offeror other than an offeror in respect of which it
has been announced that its offer is, or is likely to be, solely in
cash) must make an Opening Position Disclosure following the
commencement of the offer period and, if later, following the
announcement in which any paper offeror is first identified.
An Opening Position Disclosure must contain details of the person's
interests and short positions in, and rights to subscribe for, any
relevant securities of each of (i) Valiant; and (ii) any paper
offeror(s).
An Opening Position Disclosure by a person to whom Rule 8.3(a) applies
Business Day following the announcement in which any paper offeror is
first identified. Relevant persons who deal in the relevant securities
of Valiant or of a paper offeror prior to the deadline for making an
Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,interested in
1% or more of any class of relevant securities of Valiant
or of any paper offeror must make a Dealing Disclosure if the person
deals in any relevant securities of Valiant or of any paper offeror. A
Dealing Disclosure must contain details of the dealing concerned and of
the person's interests and short positions in, and rights to subscribe
for, any relevant securities of each of (i) Valiant; and (ii) any paper
offeror, save to the extent that these details have previously been
disclosed under Rule 8.
A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be
made by no later than 3.30 pm (London time) on the Business Day
following the date of the relevant dealing.
interest in relevant securities of Valiant or a paper offeror, they
Opening Position Disclosures must also be made by Valiant and by any
offeror and Dealing Disclosures must also be made by Valiant, by any
offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Takeover Panel's website at www.thetakeoverpanel.org.uk, including
details of the number of relevant securities in issue, when the offer
period commenced and when any offeror was first identified. If you are
in any doubt as to whether you are required to make an Opening Position
Disclosure or a Dealing Disclosure, you should contact the Panel's
Market Surveillance Unit on +44 (0)20 7638 0129.
A copy of this announcement will be made available, free of charge
subject to certain restrictions relating to persons resident in
Restricted Jurisdictions, at www.ithacaenergy.com and
www.valiant-petroleum.com by no later than 12 noon (London time) on the
Business Day following the date of this announcement.
Neither the content of any website referred to in this announcement nor
the content of any website accessible from hyperlinks on Ithaca or
Valiant's website (or any other website) is incorporated into, or forms
part of, this announcement.
In accordance with Rule 2.10 of the Code, Ithaca confirms that it has
259,953,336 Ithaca Shares (without par value) in issue and listed on
the Toronto Stock Exchange and admitted to trading on AIM under ISIN
CA4656761042.
The Boards of Ithaca and Valiant are pleased to announce that they have
Ithaca Bidco will acquire the entire issued and to be issued share
capital of Valiant.
It is intended that the Acquisition will be effected by way of a
Act, further details of which are contained in paragraph 12 below. The
Scheme requires approval by Valiant Shareholders at the Court Meeting
and the General Meeting which are to be convened to approve the
Acquisition. Further details of the Court-sanctioned scheme of
arrangement and the requisite level of Valiant Shareholder approvals
are contained in paragraph 12 below. The Acquisition is also
conditional on, among other things, certain regulatory approvals.
Pursuant to the terms of the Acquisition, Valiant Shareholders will be
for each Valiant Share
307 pence in cash and 1.33 Ithaca Consideration Shares
Based on the Closing Price of an Ithaca Share of C$1.97 (126 pence) on
28 February 2013, the Acquisition values the entire issued and to be
issued share capital of Valiant at approximately GBP203 million
(equivalent to approximately US$309 million and C$318 million) and each
Valiant Share at approximately 475 pence.
The consideration payable under the Acquisition represents a premium of
The Ithaca Consideration Shares to be issued pursuant to the
The Ithaca Consideration Shares will rank equally in all respects with
the existing Ithaca Shares and will be entitled to receive any
dividends and/or other distributions declared or paid by Ithaca in
respect of common shares of Ithaca with a record date falling after the
Fractions of Ithaca Consideration Shares will not be allotted to
Valiant Shareholders pursuant to the Acquisition. However, the
entitlements of Valiant Shareholders will be rounded up or down (with
0.5 of an Ithaca Consideration Share being rounded up) to the nearest
whole number of Ithaca Consideration Shares.
The Acquisition is in line with Ithaca's stated strategy of growing
shareholder value by building a highly-cash generative North Sea oil
and gas Business via one of its key objectives, the delivery of
continued growth of cash flow per share and expansion of the cash flow
base through accretive acquisitions.
Ithaca's strong balance sheet position enables it to deliver a highly
accretive acquisition that materially increases and diversifies its
production and reserves base. Ithaca, post acquisition, maintains a
fully funded capital programme and Business plan. Based on the tax
free forecast cash flows of Ithaca and the implementation of an oil
price hedging programme, the additional debt used to finance the
Acquisition is anticipated to be repaid within approximately two years,
with the full cost repaid within approximately two and a half years.
Three key metrics by which the Acquisition can be measured are outlined
Assets       Tax Allowances2  Total
Enterprise Value1/2P Reserves US$11.1/bbl  US$13.2bbl       US$24.3/bbl
1 Enterprise Value defined as Acquisition price plus debt
and associated working capital
2 US$500M UK tax allowances plus US$23 million Norwegian
tax refund from 2012 expenditure, present value US$251
Cash Flow Per Share  2013        2014
Pre-Acquisition     US$0.4/sh  US$1.5/sh
Post-Acquisition    US$1.3/sh  US$2.1/sh
(c) Enterprise Value/2013 Average Production: Over US$48,000
The assets of Ithaca and Valiant have a strong strategic fit, with the
substantial immediate increase in oil production from the acquired
Valiant assets complementing Ithaca's near term production growth
Specifically, the Acquisition is anticipated to:
- more than double Ithaca's 2013 forecast production from 6-6.7kboe/
d to 14-16kboe/d, rising thereafter to an upper range production
outlook of approximately 25kboe/d in 2014 and 27kboe/d in 2015;
- increase high netback oil production as a proportion of total
production in both 2013 and 2014 to approximately 90% (such production
priced at or around the Brent benchmark);
- broaden Ithaca's 2013 producing asset base to 11 fields, with a
further operated field scheduled to start-up in H2-2013;
- increase Ithaca's production per Ithaca Share by approximately
100% in 2013 and 33% in 2014;
- increase total 2P reserves by approximately 35% to 74MMboe(1),
with approximately 65% of total 2P reserves being oil;
- produce a balanced 2P reserves portfolio by increasing 2P
producing asset reserves to approximately 37MMboe(1), representing
approximately 50% of total 2P reserves;
- increase forecast 2013 cash flow from operations to approximately
US$400 million, rising to over US$700 million in 2015;
- increase forecast 2013 cash flow per Ithaca Share by 225% and 2014
cash flow per Ithaca Share by 40%;
- add approximately US$500 million in UK tax allowances (end-2012
balance) and a US$23 million Norwegian tax refund relating to
expenditure incurred in 2012;
- create a combined entity with estimated UK tax allowances of
approximately US$915 million (end-2012 balance), which will shelter
combined cash flows from the payment of UK tax over the medium term;
- result in an enhanced pro forma 2013 balance sheet, with forecast
Ithaca net debt to cash flow pre-Acquisition of approximately 2.1x
reducing to approximately 1.2x post-Acquisition;
- continue to maintain low decommissioning liability exposures;
- provide strategic entry into Norway, a geography with significant
remaining hydrocarbon potential;
- add assets with upside potential from appraisal drilling as well
as production enhancement programmes;
- provide cost synergies through the removal of administrative and
operational overlaps; and
- enable an on-going farm-out campaign to allow a focused and
reduced commitment exploration programme in the context of an enlarged
The Acquisition will establish Ithaca as a leading mid-cap North Sea
oil and gas operator with the strategy continuing to remain firmly
centred on the delivery of production and development-led growth.
In summary, the impact of the Acquisition in respect of:
(a) cash flows from operations ("CFFO") are:
CFFO1,2          2013 (US$m) 2014(US$m) 2015(US$m)
Pre-Acquisition  118         390        506
Post-Acquisition 420         662        731
Increase         302         272        225
2P Reserves1     MMboe
Without Valiant  55
With Valiant     74
Increase         19
(c) anticipated production profiles are:
Production Profiles1 2013 (kboe/d) 2014(kboe/d) 2015(kboe/d)
Pre-Acquisition      6.0 -6.7      13.0 - 15.5  16.5 - 19.5
Post-Acquisition     14.0 - 16.2   21.0- 25.0   23.0- 27.0
Increase             8.0 - 9.5     8.0 - 9.5    6.5 - 7.5
1  (a), (b) and (c) above include the anticipated
contribution from the yet to be completed MacCulloch acquisition.
2  The CFFO is derived from US$100/bbl Brent and 55p/therm
gas price, 3% per annum inflation and anticipated hedging. The CFFO
does not take into account Ithaca's assumption of capital expenditure
associated with Valiant's existing assets of approximately US$210
million over the next two years (including Norwegian capital
expenditure net of the applicable 78% tax refund).
The Valiant Board, which has been so advised by Morgan Stanley (as the
independent financial adviser for the purposes of Rule 3 of the Code),
considers the terms of the Acquisition to be fair and reasonable. In
providing its advice to the Valiant Board, Morgan Stanley has taken
into account the commercial assessments of the Valiant Board.
Accordingly, the Valiant Board intends to recommend that Valiant
beneficial holdings in Valiant, which amount in aggregate, to 433,695
Valiant Shares, representing approximately 1.1% of the entire issued
share capital of Valiant (as described in Appendix III).These
Founded in 2004 and admitted to trading on AIM in March 2008, Valiant
has built a balanced and attractive portfolio of production,
development and exploration assets, which combined with its strong
cashflow, provides a solid foundation to deliver growth and shareholder
Recognising this position of strength and the alternative directions
available to Valiant and the near term upside potential from a
well-developed 2013 exploration programme, the Valiant Board initiated
the Strategic Review on 6 September 2012 with the aim of identifying
the full range of strategic options available to Valiant and maximising
value created from the existing asset base.
During the Strategic Review, it became clear that there were advantages
to Valiant in enlarging the Valiant Group with better access to capital
and diversification of risks across a broader portfolio and a further
range of options. Thus after thorough evaluation of the full range of
available strategic options and taking into account the more limited
flexibility for growth on a standalone basis, the Valiant Board
considers the proposed acquisition by Ithaca to be the most attractive
opportunity for Valiant Shareholders with compelling strategic and
financial rationale.
The formal sale process has now been concluded. The end of the formal
sale process means that the data room which has been open to
participants will be closed with effect from 7.00 am on 1 March 2013.
Other potential offerors can still nonetheless announce competing
offers for Valiant.
The Valiant Board believes that the acquisition by Ithaca, which at the
Closing Price of an Ithaca Share on 28 February 2013 (the last Business
Day prior to the date of this announcement), represents a significant
premium to Valiant's current and recent share prices, recognises the
value of Valiant's producing asset base and enables Valiant
Shareholders to realise a proportion of this value in cash, whilst
retaining exposure to future growth of the Business through an
ownership of approximately 18% of Ithaca.
The Panel has consented to Valiant entering into a break fee
7. Irrevocable undertakings and letters of intent
Ithaca Bidco has received irrevocable undertakings to vote in favour of
Meeting from the following Valiant Shareholders in respect of an
aggregate of 2,537,695 Valiant Shares, representing approximately 6.20%
of Valiant's issued share capital:
- Valiant Directors in respect of 433,695 Valiant Shares,
representing approximately 1.06% of Valiant's issued share capital; and
- Artemis Investment Management LLP in respect of 2,104,000 Valiant
Shares, representing approximately 5.14% of Valiant's issued share
In addition, Ithaca Bidco has received non-binding letters of intent to
and the General Meeting from the following Valiant Shareholders in
respect of an aggregate amount of 14,392,784 Valiant Shares,
representing approximately 35.15% of Valiant's issued share capital:
- AXA Investment Managers UK Limited in respect of 5,582,436
Valiant Shares, representing approximately 13.63% of Valiant's issued
- GLG Partners LP in respect of 4,025,585 Valiant Shares,
representing approximately 9.83% of Valiant's issued share capital;
- Praxient Capital LLP in respect of 2,717,137 Valiant Shares,
representing approximately 6.64% of Valiant's issued share capital; and
- Aviva Investors Global Services Limited in respect of 2,067,626
Valiant Shares, representing approximately 5.05% of Valiant's issued
Ithaca Bidco has therefore received irrevocable undertakings and
non-binding letters of intent to vote in favour of the Scheme and the
resolutions at the Court Meeting and the General Meeting in respect of
an aggregate of 16,930,479 Valiant Shares, representing approximately
41.35% of Valiant's issued share capital.
circumstances in which they may cease to be binding) and letters of
intent are set out in Appendix III to this announcement.
In addition, although no shareholder approval of Ithaca or Ithaca Bidco
is required in connection with the Acquisition, Ithaca Bidco has
8. Information on Ithaca and Ithaca Bidco
Ithaca, through its wholly-owned subsidiary, Ithaca Energy (UK)
and development activities in the North Sea.
Ithaca's strategy is to grow shareholder value by building a highly
cash-generative North Sea oil and gas Business. Execution of the
strategy is centred on: maximising cash flow and production from
existing assets; delivering material growth by appraising and
developing existing hydrocarbon discoveries; and continuing to increase
and diversify Ithaca's portfolio and cash flows via acquisitions.
Ithaca is incorporated in Alberta, Canada and Ithaca Shares are listed
on the Toronto Stock Exchange and admitted to trading on AIM. Ithaca
Bidco is a wholly-owned subsidiary of Ithaca incorporated under the
laws of Scotland for the purpose of making the Acquisition. Ithaca
Bidco has not traded since incorporation, nor has it entered into any
obligations, other than in connection with the Acquisition and the
financing of the Acquisition.
9. Information on Valiant
Valiant has a balanced portfolio of producing, development and
has deep knowledge of the geology and regulatory environment. Valiant
Shares were admitted to trading on AIM in March 2008 (AIM: VPP).
The Valiant Group's production foundation provides sustained cash
flows, which funds investment and limits downside risk. Valiant invests
in exploration and development projects which are individually material
compared to the size of Valiant, giving significant upside exposure.
Valiant's proved plus probable reserves as at 31 December 2012 are 18.9
million(3) barrels of oil. This figure is inclusive of:
- a re-categorisation of 6.6 million barrels of oil associated with
the Crawford and Porter fields from proved plus probable reserves into
- a write-off of the small amount of reserves associated with the
Conrie well; and
- a downward adjustment on the Causeway Field to 3.6 MMstb net to
Valiant has today announced that it has completed drilling of the Timon
prospect (Valiant, 10%) located in the UK Northern North Sea in Blocks
211/11b and 211/16b. The Upper Jurassic sands were found to be poorly
developed in the target location and the well will now be plugged and
Valiant's interests in currently producing oilfields are:
- Don Southwest (UK P236, 211/18a Don Southwest Area): 40%
- West Don (UK P236, 211/18a West Don Area): 17.275% (unitised)
- Causeway (UK P1383, 211/23d): 64.5% (operator)
Valiant also has the following on-going operated development project:
- Fionn (UK P201, 211/22a South East Area): 64.5% (expected to
increase in due course to 100%, the transfer of which remains subject
to certain documentation and consent from the Department of Energy and
Additionally, over the past few years, Valiant has built a substantial
exploration licence portfolio in its core areas of UK and Norway
through a combination of active participation in the UK offshore
licensing rounds and selected farm-in opportunities. Valiant seeks to
take high equity interests in blocks during the prospect identification
/evaluation phase farming-down its overall holdings, if appropriate,
prior to drilling to manage the Valiant Group's financial exposure to
any single well. During 2011, Valiant acquired Sagex Petroleum ASA to
build and grow a Business in Norway to expand its overall geographic
footprint and thereby gain access to a substantial additional
exploration and development opportunity. The acquisition of Sagex also
provided Valiant with substantial expertise and local knowledge as an
important key to unlocking early success and maximising value for
Valiant's interests in key near-term exploration and appraisal
- Handcross (UK P.1631, 204/18b): 90% - formal farm-out process
- Isabella (UK P.1820, 30/6c, 11a &amp; 12d): 20%4 - farm-out agreed in
- Beverley (UK P.1792, 21/30f &amp; 22/26c): 40% - farm-out under
- Storbarden (Norway PL506 S, BS, CS, DS 26/5, 26/8, 26/2): 25% -
drilling March 2013
- Norvarg (Norway PL535, 7225/3, 7226/1): 13% - appraisal well of
an existing discovery
- Matrosen (Norway PL659, 7121/3; 7122/1, 2; 7221/10, 12; 7222/11,
12): 5%
3  This assumes 100% working interest in the Fionn field, the
transfer of which remains subject to certain documentation and consent
from the Department of Energy and Climate Change.
4  Valiant's interest is expected to reduce from 50% to 20%
on farm-out.
Ithaca confirms that, upon completion of the Acquisition, two existing
Valiant Directors, Mr Jannik Lindbaek and Mr Michael Bonte-Friedheim,
will be appointed to the Board of Ithaca as Non-Executive Directors.
Both Mr Lindbaek and Mr Bonte-Friedheim have considerable oil and gas
industry experience, both in the North Sea and internationally, and
will be central to ensuring a seamless and efficient integration of
Valiant's assets into Ithaca's existing operations. Mr Lindbaek was
previously Chairman of the Norwegian international oil and gas company
Statoil ASA, prior to its merger with Norsk Hydro in 2007. Mr
Bonte-Friedheim, an investment banker by background, was previously
Chairman and subsequently CEO of Mediterranean Oil and Gas plc, a UK
AIM-traded company, and is currently co-CEO of NextEnergy Capital, a
merchant bank focused on the renewable energy sector, as well as acting
CEO of Valiant.
Ithaca expects that the other members of the Valiant Board will cease
to have any involvement with the Ithaca Business from the Effective
Date and that they will resign as directors from Valiant at such time.
Within one month of the Scheme becoming Effective, Ithaca will
instigate a thorough review of the Business and locations of the
Combined Group to identify and achieve operational synergies. Ithaca
currently expects this review to result in a reduction of head count of
the Valiant Group and places of Business where there is opportunity to
achieve efficiencies in respect of the Combined Group's administrative
or operational functions, including the proposed closure of Valiant's
Woking office. Ithaca has agreed that appropriate employee outplacement
programmes will be provided in the event that any redundancies are
implemented after the Scheme has become effective.
Ithaca confirms that, following completion of the Acquisition, the
existing contractual and statutory employment rights, including in
relation to pensions, of all Valiant employees will be honoured.
11. Valiant Share Schemes
Participants in the Valiant Share Schemes will be contacted regarding
the effect of the Acquisition on their rights under the Valiant Share
Schemes in accordance with the terms of the relevant plan rules and
appropriate proposals will be made to such participants in due course
in accordance with the Co-operation Agreement (as summarised in
paragraph 16 below).
It is intended that the Acquisition will be effected by means of a
Court-sanctioned scheme of arrangement of Valiant under Part 26 of the
Companies Act (including the Capital Reduction under section 641 of the
The purpose of the Scheme is to provide for Ithaca Bidco to become the
owner of the entire issued and to be issued share capital of Valiant.
This is to be achieved by the cancellation of the Scheme Shares and the
application of the reserve arising from such cancellation in paying up
in full a number of new ordinary shares in Valiant which is equal to
the number of Scheme Shares so cancelled, and issuing such new Valiant
ordinary shares to Ithaca Bidco. In consideration for this, the Scheme
Shareholders will receive cash consideration and Ithaca Consideration
Shares on the basis set out in paragraph 2 of this announcement. The
cancellation of those Scheme Shares and the subsequent issue of new
Valiant Shares to Ithaca Bidco will result in Valiant becoming a
wholly-owned subsidiary of Ithaca Bidco.
To become Effective, the Scheme must be approved by a majority in
number of those Scheme Shareholders entitled to vote and present and
voting at the Court Meeting (either in person or by proxy) representing
at least 75% in value of the Scheme Shares held by such Scheme
Shareholders. In addition, the implementation of the Scheme requires
approval by the passing of a special resolution by Valiant Shareholders
at the General Meeting to be held immediately after the Court Meeting.
The Scheme and the Capital Reduction must also be sanctioned by the
Court. All Shareholders are entitled to attend the Court Hearing in
person or through counsel to support or oppose the sanctioning of the
Scheme. The Scheme and Capital Reduction will only become Effective
upon delivery to the Registrar of Companies of a copy of the Court
Order(s) and associated statement of capital (and, if the Court so
orders, upon registration by him of them).
The Scheme will also be subject to certain Conditions and further terms
referred to in Appendix I to this announcement and to be set out in the
Ithaca Bidco reserves the right to switch from implementing the
Acquisition by means of a scheme of arrangement under Part 26 of the
Companies Act to a Takeover Offer, in accordance with paragraph 8 of
Appendix 7 of the Code, with the consent of the Panel and the Valiant
Board (save that Ithaca Bidco need not obtain the consent of the
Valiant Board if the election is made within ten days of the date a
firm intention to announce an offer for the entire issued and to be
issued share capital of Valiant is announced by a third party).
Subject to satisfaction of the Conditions, the Scheme is expected to
become Effective on or around 19 April 2013. The Acquisition will lapse
if the Scheme does not become Effective by 1 September 2013 (or such
later date as may, with the consent of the Panel (if required), be
agreed between Ithaca Bidco and Valiant), provided however that this
deadline may be waived by Ithaca Bidco.
Upon the Scheme becoming Effective, it will be binding on all Valiant
Shareholders, irrespective of whether or not they were present or voted
at the Court Meeting or the General Meeting and, if they did vote,
whether or not they voted in favour of or against the resolutions
proposed at those meetings.
Further details of the Scheme will be set out in the Scheme Document,
together with notices of the Court Meeting and the General Meeting and
the accompanying Forms of Proxy, which are expected to be despatched to
Valiant Shareholders as soon as reasonably practicable and in any event
within 28 days of this announcement, unless otherwise agreed with the
13. Financing the Acquisition
The cash consideration payable under the terms of the Acquisition will
be funded by utilising funds made available to Ithaca Bidco pursuant to
a bridge credit agreement entered into between Ithaca, Ithaca Bidco,
Banc of America Securities Limited, BNP Paribas and The Bank of Nova
Scotia together with Ithaca's existing cash resources, which will be
made available to Ithaca Bidco. The bridge credit facility provides a
12 month facility of US$350 million to bridge the transfer of Valiant's
assets into Ithaca's existing (enlarged) borrowing base facility, such
funds to be utilised to satisfy the cash consideration payable under
the terms of the Acquisition (approximately $US200 million) and the
repayment of all outstanding Valiant debt and associated working
capital requirements (approximately US$150 million). Cenkos, financial
adviser to Ithaca and Ithaca Bidco, is satisfied that sufficient
resources are available to satisfy in full the cash consideration
payable to Valiant Shareholders under the terms of the Acquisition.
It is intended that dealings in Valiant Shares will be suspended at the
Scheme Record Time and that no transfers of Valiant Shares will be
registered after that time. Application will be made to the London
Stock Exchange for the cancellation of the admission to trading of the
Valiant Shares to AIM upon or shortly after the Effective Date.
When the Scheme becomes effective in accordance with its terms, the
Valiant Shares will be cancelled. At that point, share certificates in
respect of Valiant Shares will cease to be valid and entitlements to
Valiant Shares held within the CREST system will be cancelled.
It is also intended that Valiant will be re-registered as a private
company under the relevant provisions of the Companies Act, with effect
from the Scheme becoming Effective.
15. Settlement, listing and dealing of Ithaca Consideration
It is intended that applications will be made for the Ithaca
Consideration Shares to be listed on the Toronto Stock Exchange and
admitted to trading on AIM. It is expected that listing of the Ithaca
Consideration Shares on the Toronto Stock Exchange and the admission to
trading on AIM will become effective once Ithaca has fulfilled all of
the listing requirements of the Toronto Stock Exchange and that trading
of the Ithaca Consideration Shares on AIM will become effective, and
that dealings for normal settlement in the Ithaca Consideration Shares
traded on AIM will commence, not later than the Business Day after the
Shares of non-UK companies (such as Ithaca) cannot be held and
transferred directly into the CREST system. Holders of Scheme Shares
who hold Valiant Shares in uncertificated form (that is, in CREST) will
be entitled to Ithaca Depository Interests, representing the Ithaca
Consideration Shares to which the relevant Valiant Shareholder is
entitled under the terms of the Scheme. The Ithaca Depository Interests
can be held and transferred through the CREST system. It is expected
that the Ithaca Depository Interests will trade under ISIN CA4656761042
in the same way as existing Ithaca Shares.
Further details on listing, dealing and settlement will be included in
The Ithaca Consideration Shares will be subject to the provisions of
certain Canadian securities laws and regulations.
On 1 March 2013, Valiant and Ithaca entered into a confidentiality
agreement in a customary form in relation to the Acquisition, pursuant
to which they each undertook, subject to certain exceptions, to keep
information relating to Valiant and Ithaca confidential and to not
disclose it to third parties. Unless terminated earlier, the
confidentiality obligations will remain in force for three years from
On 1 March 2013, Valiant, Ithaca Bidco and Ithaca entered into the
Co-operation Agreement pursuant to which, in relation to the Valiant
Share Schemes, the parties have agreed that:
- Awards granted in 2010 under the LTIP will vest, subject to the
satisfaction of the applicable performance target, on 9 April 2013 in
accordance with the terms of the LTIP;
- Awards granted in 2011 and 2012 under the LTIP will vestimmediately
following Court sanction of the Scheme in accordance with
the terms of the LTIP with the effect that 100% of the awards granted
in 2011 will vest and approximately 67% of the awards granted in 2012
will vest; and
- Options granted under the Option Schemes, all of which will either
already be exercisable immediately before or become exercisable as a
result of the Scheme, may be exercised in accordance with the rules of
Valiant Shares issued prior to the Scheme Record Time, either pursuant
to such awards or options or to an employee benefit trust for the
express purpose of satisfying those awards or options at that time,
shall be subject to the Scheme.
Ithaca has agreed that appropriate employee outplacement programmes
will be provided in the event that any redundancies are implemented
after the Scheme has become effective.
The Co-operation Agreement also includes reciprocal obligations on the
part of Valiant, Ithaca and Ithaca Bidco to use their reasonable
endeavours to provide each other with information or assistance for the
purposes of obtaining any official authorisation or regulatory
clearance required in connection with the implementation of the
Acquisition, including in respect of any consents required from the
granting authorities of exploration or production licences in Norway,
Iceland or the Faroe Islands in accordance with the applicable laws and
regulations of those territories.
Ithaca and Ithaca Bidco will each be making an Opening Position
Valiant will make an Opening Position Disclosure, setting out details
required to be disclosed by it under Rule 8.2(a) of the Code.
18. Expected Timetable
Further details of the Scheme will be contained in the Scheme Document
which is currently expected to be posted to Valiant Shareholders on or
around 12 March 2013, and in any event within 28 days of this
announcement unless otherwise agreed with the Panel.
Further details on the timetable for implementation of the Scheme will
be set out in the Scheme Document, which will also include the notices
of the Court Meeting and the General Meeting and specify the necessary
actions to be taken by Valiant Shareholders. It is currently expected
that the Scheme Document will be posted on or around 12 March 2013 and
that the Court Meeting and General Meeting will be held on or around 2
If the Scheme does not become Effective by 1 September 2013, the
Acquisition will lapse except where the approval of Valiant
before this date, in which case the longstop date for the Acquisition
may be extended to such later date as Ithaca Bidco and Valiant may
agree and, if appropriate, the Court may approve.
The Acquisition will be subject to the conditions and further terms set
out in Appendix I and the full terms and conditions which will be set
out in the Scheme Document. Prior approval for the Acquisition will be
required from certain government or regulatory bodies including, among
others, the Secretary of State for Energy and Climate Change in the UK,
the Norwegian Ministry of Petroleum and Energy and the Norwegian
In addition, as set out in Condition 3(j)(i) in Appendix I, the
Acquisition will be conditional upon a Brent Failure Event not having
occurred. Accordingly, if a Brent Failure Event does occur, Ithaca
Bidco may, subject to the consent of the Panel, be entitled not to
proceed with the Acquisition. The Ithaca Board believes that the
continuing operation of the Brent System is of fundamental importance
to Valiant's Business. The Brent System failing to function or being
materially restricted will impact on Valiant Production and could
significantly reduce Valiant's cash flow.
The availability of the Ithaca Consideration Shares under the terms of
the Acquisition to persons not resident in the United Kingdom may be
prohibited or affected by the laws and regulations of the relevant
jurisdictions. Such persons should inform themselves about and observe
any applicable requirements. Further details in relation to Overseas
Shareholders will be contained in the Scheme Document.
Copies of the following documents will be available on the websites of
Ithaca and Valiant at, respectively, www.ithacaenergy.com and
www.valiant-petroleum.com by not later than 12 noon on 4 March 2013
(being the Business Day following the date of this announcement):
- the break fee agreement referred to at paragraph 6 above;
- the irrevocable undertakings and letters of intent referred to at
paragraph 7 above and summarised in Appendix III to this announcement;
- the bridge credit facility referred to at paragraph 13 above;
- the confidentiality agreement referred to at paragraph 16 above;
- the Co-operation Agreement referred to at paragraph 16 above.
The Acquisition will be made subject to the Conditions and on the terms
set out in Appendix I to this announcement and on the further terms and
Conditions to be set out in the Scheme Document. The Scheme will be
governed by English law and subject to the applicable rules and
regulations of the London Stock Exchange, the Panel and the FSA.
The Conditions and certain further terms of the Acquisition are set out
in Appendix I to this announcement. Appendix II sets out the sources
and bases of certain financial and other information contained in this
announcement. Appendix III contains details of the irrevocable
undertakings and letters of intent given to Ithaca Bidco. Appendix IV
contains the definitions of certain terms used in this announcement.
period as required under Section 4 of Appendix 4 of the Code.
other than pursuant to the Acquisition, until the Effective Date,
lapses or is otherwise withdrawn. These purchases may occur either in
Note regarding oil and gas disclosure(1)
Valiant are based on the 2007 SPE/AAPG/WPC/SPEE Petroleum Resource
interested in 1% or more of any class of relevant securities of Valiant
PART A: Conditions of the Acquisition
1. The Acquisition will be conditional upon the Scheme
becoming unconditional and becoming Effective by not later than 1
September 2013, or such later date (if any) as Ithaca Bidco and Valiant
may, with the consent of the Panel (if required), agree and (if
(a) (i) its approval by a majority in number, representing
75% or more in value, of Scheme Shareholders present, entitled to vote
and voting, either in person or by proxy, at the Court Meeting (or at
any adjournment of such meeting); and (ii) such Court Meeting being
held on or before the date that is the twenty-second day after the
expected date of the Court Meeting to be set out in the Scheme Document
(or such later date as may be agreed by Ithaca Bidco and Valiant);
(b) (i) the special resolution required to approve and
implement the Scheme (including, without limitation, to amend Valiant's
articles of association) being duly passed by the requisite majority of
Valiant Shareholders at the General Meeting (or at any adjournment of
such meeting); and (ii)such General Meeting being held on or before the
date that is the twenty-second day after the expected date of the
General Meeting to be set out in the Scheme Document (or such later
date as may be agreed by Ithaca Bidco and Valiant);
(c) the sanction of the Scheme and the confirmation of the
Capital Reduction by the Court being obtained (in both cases with or
without modification, any such modification being on terms acceptable
to Valiant and Ithaca Bidco); and
(d) the delivery of office copies of the Court Order(s) and
the requisite statement of capital to the Registrar of Companies and,
if so ordered by the Court, the registration of the Court Order(s) and
such statement of capital by the Registrar of Companies.
3. In addition, Ithaca Bidco and Valiant have agreed that
the Acquisition is also conditional on the following conditions having
been satisfied or, where applicable, waived and accordingly the
necessary actions to make the Scheme Effective will not be taken unless
such conditions have been so satisfied or waived:
(a) the London Stock Exchange having acknowledged to Ithaca
or its agent (and such acknowledgement not having been withdrawn) that
the Ithaca Consideration Shares will be admitted to trading on AIM;(b) the
Toronto Stock Exchange having confirmed acceptance
of the listing of the Ithaca Consideration Shares on the Toronto Stock
Exchange (and such acceptance not having been withdrawn), subject only
to the satisfaction of customary conditions of the Toronto Stock
(c) without prejudice to Conditions 3(e) or 3(f) below,
Ithaca Bidco having obtained the consent of the Norwegian Ministry of
Petroleum and Energy and the Norwegian Ministry of Finance to the
change of control of the relevant Licensee or its ultimate holding
company in accordance with the applicable laws and regulations of that
(d) without prejudice to Conditions 3(e) or 3(f) below, the
Secretary of State for Energy and Climate Change not having indicated
an intention to: (i) revoke or recommend the revocation of any
exploration or production licence held by any member of the Wider
Valiant Group (as defined below); or (ii) require a further change of
control of any such member as a result of the Scheme becoming
(e) no government or governmental, quasi-governmental,
supranational, statutory, administrative or regulatory body, authority,
court, trade agency, association, institution, environmental body or
any other person or body in any jurisdiction (each a "Relevant
Authority") having decided to take, instituted, implemented or
threatened any action, proceedings, suit, investigation, enquiry or
reference, or made, proposed or enacted any statute, regulation, order
or decision or taken any other steps and there not continuing to be
outstanding any statute, regulation, order or decision, which would or
(i) make the Acquisition or the acquisition of any Valiant
Shares, or control of Valiant or any member of the Valiant Group, by
Ithaca or any member of the Ithaca Group void, illegal and/or
unenforceable under the laws of any jurisdiction or otherwise
materially restrict, restrain, prohibit, delay or interfere with the
implementation thereof, or impose material additional conditions or
obligations with respect thereto, or require material amendment thereof
or otherwise challenge or interfere therewith in any such case in a
manner which is material in the context of the Acquisition;
(ii) require or prevent the divestiture by any member of the
Valiant Group or any company of which 20% or more of the voting capital
is held by any member of the Valiant Group or any partnership, joint
venture, firm or company in which any member of the Valiant Group may
be interested (the "Wider Valiant Group") or by any member of the
Ithaca Group or any company of which 20% or more of the voting capital
is held by any member of the Ithaca Group or any partnership, joint
venture, firm or company in which any member of the Ithaca Group may be
interested (the "Wider Ithaca Group") of all or a material portion of
their respective Businesses, assets or property or impose any material
limitation on the ability of any of them to conduct their respective
Businesses or own any of their material assets or property in any such
case in a manner which is material in the context of the Acquisition;
(iii) impose any limitation on or result in a delay in the
ability of any member of the Wider Valiant Group or the Wider Ithaca
Group to acquire or to hold or to exercise effectively any rights of
ownership of shares or loans or securities convertible into shares in
any member of the Wider Valiant Group or of the Wider Ithaca Group held
or owned by it, or to exercise management control over any member of
the Wider Valiant Group or of the Wider Ithaca Group to an extent which
is material in the context of the Valiant Group taken as a whole or, as
the case may be, the Ithaca Group taken as a whole;
(iv) impose any limitation on the ability of any member of the
Wider Ithaca Group or any member of the Wider Valiant Group to conduct,
integrate or co-ordinate all or any part of their respective Businesses
with all or any part of the Business of any other member of the Wider
Ithaca Group and/or the Wider Valiant Group in a manner which is
material in the context of the Acquisition;
(v) prevent any member of the Wider Ithaca Group or the Wider
Valiant Group from operating all or any part of their Businesses in any
jurisdiction in which it currently does so to an extent which is
(vi) require any member of the Wider Ithaca Group or the Wider
Valiant Group to acquire or offer to acquire any shares or other
securities (or the equivalent) in any member of the Wider Valiant Group
or any asset owned by any third party where such acquisition would be
material in the context of the Acquisition; or
(vii) otherwise adversely affect the assets, Business, profits,
financial or trading position or prospects of any member of the Wider
Ithaca Group or of any member of the Wider Valiant Group in a manner
which is material in the context of the Acquisition;
and all applicable waiting and other time periods (including any
extensions thereof) during which any such Relevant Authority could
decide to take, institute, implement or threaten any such action,
proceeding, suit, investigation, enquiry or reference or take any other
step under the laws of any jurisdiction in respect of the Acquisition
or the acquisition of any Valiant Shares or otherwise intervene having
(f) all notifications, filings and applications which are
reasonably necessary having been made, all applicable waiting periods
(including any extensions thereof) under any applicable legislation or
regulations of any jurisdiction having expired, lapsed or been
terminated, in each case in respect of the Acquisition and the
acquisition of any Valiant Shares, or of control of Valiant, by Ithaca
Bidco, and all authorisations, orders, recognitions, grants, consents,
licences, confirmations, clearances, permissions and approvals
("Authorisations") which are reasonably necessary or appropriate in any
jurisdiction for, or in respect of, the Acquisition and the proposed
Bidco and to carry on the Business of any member of the Wider Ithaca
Group or of the Wider Valiant Group having been obtained, in terms and
in a form satisfactory to Ithaca Bidco, from all appropriate Relevant
from any persons or bodies with whom any member of the Wider Ithaca
Group or the Wider Valiant Group has entered into contractual
arrangements and all such Authorisations remaining in full force and
effect as at the Effective Date and there being no intention or
proposal to revoke, suspend or modify or not to renew any of the same
(g) no temporary restraining order, preliminary or
permanent injunction, preliminary or permanent enjoinment, or other
order threatened or issued and being in effect by a Relevant Authority
which has the effect of making the Acquisition or any acquisition or
proposed acquisition of any Valiant Shares or control or management of,
any member of the Wider Valiant Group by any member of the Wider Ithaca
Group, or the implementation of either of them, void, voidable, illegal
and/or unenforceable under the laws of any relevant jurisdiction, or
otherwise directly or indirectly prohibiting, preventing, restraining,
restricting, delaying or otherwise interfering with the consummation or
the approval of the Acquisition or any matter arising from the proposed
acquisition of any Valiant Shares, or control or management of, any
member of the Wider Valiant Group by any member of the Wider Ithaca
Group, in a manner which is material in the context of the Acquisition;
(h) except as publicly announced by Valiant prior to the
date of this announcement (by the delivery of an announcement to a
Regulatory Information Service), there being no provision of any
arrangement, agreement, licence, permit, franchise, lease, or other
instrument to which any member of the Wider Valiant Group is a party or
by or to which any such member or any of their assets is or may be
bound, entitled or be subject to and which, in consequence of the
Acquisition or the acquisition or proposed acquisition of any Valiant
Shares, or because of a change in the control of Valiant by Ithaca
Bidco or otherwise would or might, to an extent which is material in
the context of the Acquisition, result in:
(i) any monies borrowed by, or other indebtedness (actual or
contingent) of, or grant available to, any member of the Wider Valiant
Group being or becoming repayable or being capable of being declared
immediately repayable or prior to its or their stated maturity or the
ability of any such member to borrow monies or incur any indebtedness
(ii) the creation or enforcement of any mortgage, charge or
other security interest over the whole or any part of the Business,
property or assets of any member of the Wider Valiant Group or any such
security (whenever arising or having arisen) being enforced or becoming
(iii) any such arrangement, agreement, licence, permit or
instrument of any member of the Wider Valiant Group being terminated or
adversely modified or any obligation or liability arising or any action
being taken of an adverse nature thereunder;
(iv) any assets of any member of the Wider Valiant Group being
disposed of or charged, or any right arising under which any such asset
could be required to be disposed of or charged, other than in the
(v) the rights, liabilities, obligations, interests or
Business of any member of the Wider Valiant Group in or with any firm
or body or person, or any agreements or arrangements relating to such
interest or Business, being terminated or adversely modified or
(vi) any member of the Wider Valiant Group ceasing to be able
to carry on Business under any name under which it presently does so;
(vii) the creation or acceleration of any liabilities (actual or
contingent) by any member of the Wider Valiant Group;
(viii) except as agreed between Ithaca or Ithaca Bidco and
Valiant, any liability of any member of the Wider Valiant Group to make
any severance, termination, bonus or other payment to any of its
directors or officers; or
(ix) the Business, assets, profits, financial or trading
position of any member of the Wider Valiant Group being prejudiced or
(i) except as publicly announced by Valiant prior to the
Regulatory Information Service), no member of the Wider Valiant Group
having, since 30 June 2012:
(i) issued, or agreed to issue or proposed the issue of
additional shares or securities of any class, or securities convertible
into, or exchangeable for or rights, warrants or options to subscribe
for or acquire, any such shares, securities or convertible securities
(save as between Valiant and wholly-owned subsidiaries of Valiant and
save for options granted, and for any Valiant Shares allotted upon
exercise of options granted under the Valiant Share Schemes before the
date of this announcement in the ordinary course of Business or as
agreed between Ithaca or Ithaca Bidco and Valiant), or redeemed,
purchased or reduced any part of its share capital;
(ii) recommended, declared, paid or made or proposed to
recommend, declare, pay or make any bonus, dividend or other
distribution (whether payable in cash or otherwise) other than to
Valiant or a wholly-owned subsidiary of Valiant;
(iii) agreed, authorised, proposed or announced its intention
to propose any material change in its share or loan capital or merger
or demerger or acquisition or disposal of assets (other than in the
ordinary course of trading) or shares, other than as disclosed to
Ithaca and Ithaca Bidco in connection with the Valiant Group
intra-group reorganisation completed in December 2012;
(iv) issued, authorised or proposed the issue of any
debentures, or incurred any indebtedness or contingent liability which
is material in the context of the Acquisition;
(v) acquired or disposed of or transferred, mortgaged, charged
or encumbered any asset or any right, title or interest in any asset
(other than in the ordinary course of trading) in a manner which is
(vi) entered into or varied or announced its intention to enter
into or vary any contract, arrangement or commitment (whether in
respect of capital expenditure or otherwise) which is of a long-term or
unusual nature or involves or could involve an obligation of a nature
or magnitude, which in any such case is material in the context of the
(vii) entered into or proposed or announced its intention to
enter into any reconstruction, amalgamation, scheme, transaction or
arrangement (otherwise than in the ordinary course of Business) which
(viii) made any amendment to its articles of association or other
constitutional documents, except as required in the context of the
(ix) entered into any licence or other disposal of intellectual
property rights of any such member which are material in the context of
(x) taken any action nor having had any steps taken or legal
proceedings started or threatened against it for its winding-up
(voluntarily or otherwise) or dissolution or striking-off or for it to
enter into any arrangement or composition for the benefit of its
creditors, or for the appointment of a receiver, administrator, trustee
or similar officer of all or any of its assets or revenues (or any
analogous proceedings or appointment in any overseas jurisdiction);
(xi) been unable, or admitted in writing that it is unable, to
pay its debts or having stopped or suspended (or threatened to stop or
(xii) entered into or varied or made any offer to enter into or
vary the terms of any service agreement or arrangement with any of the
directors of Valiant, save in respect of the amendments to the terms of
the service agreements of Michael Bonte-Friedheim (on 12 December
2012), Kevin Lyon (on 27 November 2012), and Peter Buchanan (on 2
(xiii) proposed, agreed to provide or modified the terms of any
share option scheme, incentive agreement, pension scheme obligations or
other benefit relating to employment or termination of employment of
any employee of the Wider Valiant Group, except as agreed pursuant to
(xiv) waived, compromised or settled any claim which is material
in the context of the Acquisition; or
(xv) entered into or made an offer (which remains open for
acceptance) to enter into any agreement, arrangement or commitment or
passed any resolution with respect to any of the transactions or events
referred to in this Condition 3(i);
(j) since 30 June 2012, except as publicly announced by
Valiant prior to the date of this announcement (by the delivery of an
announcement to a Regulatory Information Service):
(i) there having been no adverse change in the Business,
member of the Wider Valiant Group which in any such case is material in
the context of the Acquisition (a "Material Adverse Change"). It is
agreed between Ithaca Bidco and Valiant that the occurrence of a Brent
Failure Event shall constitute a Material Adverse Change
notwithstanding any public announcement by Valiant prior to the date of
this announcement or any other Condition;
(ii) no litigation, arbitration proceedings, prosecution or
other legal proceedings having been instituted, announced or threatened
by or against or remaining outstanding in respect of any member of the
Wider Valiant Group (whether as claimant, defendant or otherwise) which
in any such case is material in the context of the Acquisition;
(iii) no enquiry, review or investigation by or complaint or
reference to any Relevant Authority against or in respect of any member
of the Wider Valiant Group having been threatened, announced or
instituted or remaining outstanding which in any such case is material
in the context of the Acquisition;
(iv) no steps having been taken and no omissions having been
made which would or might result in the withdrawal, cancellation,
termination or adverse modification of any licence or insurance policy
held by any member of the Wider Valiant Group which is necessary for
the proper carrying on of its Business which in any such case is
(v) no contingent or other liability having arisen, increased
or been incurred which might reasonably be expected to adversely affect
any member of the Valiant Group in a manner which is material in the
context of the Acquisition; and
(k) save as publicly announced by Valiant prior to the date
of this announcement (by the delivery of an announcement to a
Regulatory Information Service), Ithaca and Ithaca Bidco not having
(i) the financial, Business or other information concerning
the Wider Valiant Group which has been disclosed at any time by or on
behalf of any member of the Wider Valiant Group whether publicly (by
the delivery of an announcement to a Regulatory Information Service) or
to Ithaca Bidco or its professional advisers, either contains a
material misrepresentation of fact or omits to state a fact necessary
to make the information contained therein not materially misleading in
any such case in a manner which is material in the context of the
(ii) any member of the Wider Valiant Group is subject to any
liability, contingent or otherwise, which is not disclosed in the
annual report and accounts of Valiant for the financial year ended 31
December 2011 or in the interim report for the six months ended 30 June
2012 and which is material in the context of the Acquisition;
(iii) any past or present member of the Wider Valiant Group has
not complied with all applicable legislation or regulations of any
jurisdiction or any notice or requirement of any Relevant Authority
with regard to the storage, disposal, discharge, spillage, leak or
emission of any waste or hazardous substance or any substance likely to
impair the environment or harm human health which non-compliance would
be likely to give rise to any liability (whether actual or contingent)
on the part of any member of the Wider Valiant Group which is material
(iv) there has been a disposal, spillage, emission, discharge
or leak of waste or hazardous substance or any substance likely to
impair the environment or harm human health on, or from, any land or
other asset now or previously owned, occupied or made use of by any
past or present member of the Wider Valiant Group, or in which any such
member may now or previously have had an interest, which would be
likely to give rise to any liability (whether actual or contingent) on
the part of any member of the Wider Valiant Group in any such case in a
(v) there is or is likely to be any material obligation or
liability (whether actual or contingent) to make good, remediate,
repair, reinstate or clean up any property or asset now or previously
owned, occupied or made use of by any past or present member of the
Wider Valiant Group or in which any such member may now or previously
have had an interest under any environmental legislation or regulation
or notice, circular or order of any Relevant Authority in any
jurisdiction in any such case in a manner which is material in the
context of the Acquisition, other than any obligation or liability
which is not disclosed in the annual report and accounts of Valiant for
the financial year ended 31 December 2011 or in the interim report of
Valiant for the six months ended 30 June 2012, relating to any
liability under Part IV of the Petroleum Act 1998 for an asset owned or
formerly owned by the Wider Valiant Group;
(vi) circumstances exist (whether as a result of the
Acquisition or otherwise) which would be reasonably likely to lead to
any Relevant Authority instituting, or whereby any member of the Wider
Ithaca Group or any present or past member of the Wider Valiant Group
would be likely to be required to institute, an environmental audit or
take any other steps which would in any such case be reasonably likely
to result in any liability (whether actual or contingent) to improve,
modify existing or install new plant, machinery or equipment or carry
out changes in the processes currently carried out or make good,
remediate, repair, re-instate, decommission or clean up any land or
other asset currently or previously owned, occupied, operated or made
use of or controlled by any past or present member of the Wider Valiant
Group (or on its behalf) or by any person for which a member of the
Wider Valiant Group is or has been responsible, or in which any such
member may have or previously has had or is deemed to have had an
interest, in any such case which is material in the context of the
(vii) circumstances exist whereby a person or class of persons
would be likely to have any claim or claims in respect of any product
Wider Valiant Group, which claim or claims would be likely to affect
adversely any member of the Wider Valiant Group to an extent which is
(viii) there are no adequate procedures in place to prevent
persons associated with Valiant from engaging in any activity, practice
or conduct which would constitute an offence under the Bribery Act 2010
or any other applicable anti-corruption legislation; and
(ix) any asset of any member of the Wider Valiant Group
constitutes criminal property as defined in section 340(3) of the
Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that
definition) to an extent which is material in the context of the
Conditions 3(c) to (k) inclusive must be fulfilled, be determined by
Ithaca Bidco to be or remain satisfied or (if capable of waiver) be
waived by Ithaca Bidco by 11.59 p.m. on the date immediately preceding
the Court Hearing, failing which the Scheme shall lapse.
To the extent permitted by law and subject to the requirements of the
Panel, Ithaca Bidco reserves the right to waive all or any of
Conditions 3(c) to (k), in whole or in part. Ithaca Bidco shall be
under no obligation to waive or treat as fulfilled any of Conditions 3
(c) to (k) by a date earlier than the date specified above in Condition
1 for the fulfilment thereof notwithstanding that the other Conditions
of the Acquisition may at such earlier date have been waived or
indicating that any of such Conditions may not be capable of
Save with the consent of the Panel, the Scheme will not proceed if the
European Commission either initiates proceedings under Article 6(1)(c)
of Council Regulation (EEC) 4064/89 (the "Regulation") or makes a
referral to a competent authority of the United Kingdom under Article 9
(1) of the Regulation and there is then a reference to the Competition
Commission or there is a reference to the Competition Commission before
the date of the Court Meeting. In such event, neither Valiant, Ithaca
Bidco nor any Valiant Shareholder will be bound by any term of the
Scheme.PART B
(a) Ithaca Bidco reserves the right to elect, with the
consent of the Valiant Board (save that Ithaca Bidco need not obtain
the consent of the Valiant Board if the election is made within ten
days of the date a firm intention to announce an offer for the entire
issued and to be issued share capital of Valiant is announced by a
third party), to implement the Acquisition by way of a Takeover Offer.
In such event, such offer will (unless otherwise determined by Ithaca
Bidco and subject to the consent of the Panel) be effected on the same
terms and conditions subject to appropriate amendments to reflect the
change in method of effecting the Acquisition, which may include
changing the consideration structure under the terms of the Acquisition
and (without limitation and subject to the consent of the Panel) an
acceptance condition set at 90% (or such lesser percentage, being more
than 50% as Ithaca Bidco may decide), of the voting rights then
exercisable at a general meeting of Valiant, including, for this
purpose, any such voting rights attaching to Valiant Shares that are
unconditionally allotted or issued, and to any Treasury Shares which
are unconditionally transferred or sold by Valiant, before the Takeover
Offer becomes or is declared unconditional as to acceptances, whether
(b) If Ithaca Bidco is required by the Panel to make an
offer for Valiant Shares under the provisions of Rule 9 of the Code,
Ithaca Bidco may make such alterations to any of the above conditions
as are necessary to comply with the provisions of that Rule.
(c) The Acquisition and the Scheme and any dispute or
claim arising out of, or in connection with, them (whether contractual
or non-contractual in nature) will be governed by English law and will
be subject to the exclusive jurisdiction of the Courts of England.
(d) Save to the extent cancelled pursuant to the Scheme,
the Valiant Shares will be acquired under the Acquisition fully paid
and free from all liens, charges and encumbrances, rights of
pre-emption and any other third party rights of any nature whatsoever
and together with all rights attaching thereto, including the right to
receive and retain all dividends and other distributions declared, paid
or made after the date of this announcement. If any dividend or other
distribution or return of capital is proposed, declared, made, paid or
becomes payable by Valiant in respect of a Valiant Share on or after
the date of this announcement and prior to the Scheme becoming
Effective, Ithaca Bidco reserves the right to reduce the value of the
consideration payable for each Valiant Share under the Acquisition by
up to the amount per Valiant Share of such dividend, distribution or
return of capital except where the Valiant Share is or will be acquired
pursuant to the Acquisition on a basis which entitled Ithaca Bidco to
receive the dividend and/or distribution and/or return of capital and
(e) The availability of the Ithaca Consideration Shares to
persons not resident in the United Kingdom may be affected by the laws
of the relevant jurisdictions. Persons who are not resident in the
United Kingdom should inform themselves about and observe any
(f) The Ithaca Consideration Shares to be issued under the
Scheme will be issued credited as fully paid and will rank equally in
all respects with the existing Ithaca Shares, including the right to
receive in full all dividends and other distributions, if any,
declared, made or paid by reference to a record date falling after the
(g) Fractions of Ithaca Consideration Shares will not be
allotted to Valiant Shareholders pursuant to the Acquisition. However,
the entitlements of Valiant Shareholders will be rounded up or down
(with 0.5 of an Ithaca Consideration Share being rounded up) to the
nearest whole number of Ithaca Consideration Shares.
(a) as at the close of Business on 28 February 2013, being
the last Business Day prior to the date of this announcement, Ithaca
had in issue 259,953,336 Ithaca Shares and Valiant had in issue
40,945,225 Valiant Shares. The ISIN for Ithaca Shares is CA4656761042
and for Valiant Shares is GB00B2NJD643;
(b) the value placed on the issued and to be issued share
capital of Valiant (approximately GBP203 million) is based on 40,945,225
Valiant Shares in issue on 28 February 2013, being the last Business
Day prior to the date of this announcement, and options being exercised
prior to the Scheme Record Time, together with LTIP shares to be
issued, in respect of a further 1,919,149 new Valiant Shares;
(c) the closing share price of Ithaca Shares of C$1.97
(126 pence) on 28 February 2013, being the last Business Day prior to
the date of this announcement, is derived from Bloomberg;
(d) the closing share price of Valiant Shares of 346.5
pence on 28 February 2013, being the last Business Day prior to the
date of this announcement, is derived from Bloomberg;
(e) unless otherwise stated, the financial information
relating to Valiant is extracted or derived from the annual report and
accounts of Valiant for the financial year ended 31 December 2011 and
the interim report of Valiant for the six months ended 30 June 2012
(without any adjustment);
(f) unless otherwise stated, the financial information
relating to Ithaca is extracted or derived from the annual report and
accounts of Ithaca for the financial year ended 31 December 2011
(g) the exchange rate between Canadian Dollars and UK
Sterling of 1.5620 at 5.00 p.m. on 28 February 2013, being the last
Business Day prior to the date of this announcement, is derived from
(h) the exchange rate between US Dollars and UK Sterling of
1.5188 at 5.00 p.m. on 28 February 2013, being the last Business Day
prior to the date of this announcement, is derived from Bloomberg.
Meeting in respect of a total of 2,537,695 Valiant Shares,
representing, in aggregate, approximately 6.20% of Valiant's existing
issued share capital, comprised as follows:
(a) from the Valiant Directors in respect of their entire
beneficial holdings. Those holdings amount to 433,695 Valiant Shares,
representing, in aggregate, approximately 1.06% of the existing issued
share capital of Valiant. These irrevocable undertakings do not lapse
in the event of a higher competing offer being made for Valiant; and
(b) from Artemis Investment Management LLP in respect of its
entire holding of 2,104,000 Valiant Shares, representing approximately
5.14% of the existing issued share capital of Valiant. This undertaking
will cease to be binding if a third party makes a proposal to acquire
the whole of the issued and to be issued share capital of Valiant on
terms which represent (in the reasonable opinion of Cenkos) an
improvement of 10% on the consideration payable to Valiant Shareholders
pursuant to the terms of the Acquisition.
Details of letters of intent
In addition, Ithaca Bidco has also received non-binding letters of
intent to vote in favour of the Scheme and the resolutions at the Court
Meeting and the General Meeting in respect of a total of 14,392,784
Valiant Shares, representing, in aggregate, approximately 35.15% of
Valiant's existing issued share capital, comprised as follows:
(a) from AXA Investment Managers UK Limited, in respect of
5,582,436 Valiant Shares, representing 13.63% of the existing issued
share capital of Valiant;
(b) from GLG Partners LP, in respect of 4,025,585 Valiant
Shares, representing 9.83% of the existing issued share capital of
(c) from Praxient Capital LLP, in respect of 2,717,137
Valiant Shares, representing 6.64% of the existing issued share capital
of Valiant; and
(d) from Aviva Investors Global Services Limited, in respect
of 2,067,626 Valiant Shares, representing 5.05% of the existing issued
share capital of Valiant.
context requires otherwise:"2P"          proven and probable"Acquisition"
the recommended acquisition by Ithaca Bidco of the entire
issued and to be issued share capital of Valiant, to be
effected by means of the Scheme (or if Ithaca Bidco
validly elects in accordance with the condition in
paragraph (a) of Part B of Appendix I, by means of a
Takeover Offer) on and subject to the Conditions"AIM"
AIM, a market operated by the London Stock Exchange"Brent        the Brent
System failing to function or being materially
Failure       restricted (for any reason other than a planned shutdown)
Event"        on the Business Day immediately preceding the Scheme
Record Time and Valiant having been formally notified by
the relevant Operator of the same (or where Valiant is
aware of the same from its daily production reports from
SVT) and:
a. such failure to function or such restriction is
unlikely to be remedied for a period of four months
commencing on the Business Day immediately preceding the
Scheme Record Time provided the same can be ascertained
from and validated by reference to the relevant
Operator's opinion or estimates; or
b. where such relevant Operator's opinion or estimates
as described in (a) above are not available on the
Business Day immediately preceding the Scheme Record
Time, the Brent Failure Event shall be deemed to have
(i) Valiant Production during the 30 calendar days prior
to the Scheme Record Time is on average (excluding any
day(s) on which a planned shutdown occurs) less than
5,400 barrels per day; unless
(ii) Valiant can provide third party expert opinions or
estimates from reputable independent experts qualified
to opine on matters related to North Sea oil and gas
production issues who have been engaged by Valiant (or
the relevant Operator, where such report is shared with
Valiant) to provide such an opinion/estimate having been
provided with all facts and information available to
Valiant in order to make such determination which
demonstrate that production from the Dons fields
facilities and the Causeway fields facilities will, or is
reasonably likely to, be restored to a level where
Valiant Production is not less than 5,400 barrels per
day, within a period of four months commencing on the
Time"Brent        the offshore storage and pumping station on the platform
System"       known as "Cormorant Alpha" and the pipeline extending
from the Cormorant Alpha platform up to and including the
insulating flange where such pipeline joins the scraper
trap at the SVT"Business     any day (excluding any day which
is a Saturday, Sunday or
Day"          public holiday in England and Wales) on which banks in
the City of London are open for general banking
Business"Canada"      Canada, its provinces and territories and all areas
subject to its jurisdiction and any political
sub-division thereof"Capital      the proposed reduction of
the ordinary share capital of
Reduction"    Valiant provided for in the Scheme under section 641 of
the Companies Act"Cenkos"      Cenkos Securities plc"Closing
the closing middle market quotation of a Valiant Share or
Price"        an Ithaca Share (as appropriate) as derived from the AIM
appendix to the Daily Official List"Code"        the City
Code on Takeovers and Mergers"Combined     the Ithaca Group and the Valiant
Group"        completion of the Acquisition"Companies    the Companies Act
Act""Competing    an offer (as defined in the Code) (whether or not on a
Offer"        pre-conditional basis) for the entire issued and to be
issued share capital of Valiant which is or has been
announced, made or entered into by a person (other than
Ithaca Bidco and/or Ithaca) who is not acting in concert
(as defined in the Code) with Ithaca Bidco and/or
Ithaca"Conditions"  the conditions to the implementation of the Scheme as
out in Appendix I to this announcement and to be set out
in the Scheme Document"Co-operation the co-operation
agreement dated 1 March 2013 entered
Agreement"    into between Ithaca, Ithaca Bidco and Valiant"Court"
Her Majesty's High Court of Justice in England and Wales"Court        the
hearing of the Court to sanction the Scheme
Hearing""Court        the meeting of Scheme Shareholders to be convened
Meeting"      pursuant to an order of the Court under Part 26 of the
Companies Act for the purposing of considering and, if
thought fit, approving the Scheme (with or without
amendment) including any adjournment thereof"Court        the
order(s) of the Court sanctioning the Scheme and
Order(s)"     confirming the Capital Reduction under the Companies
Act"CREST"       the relevant system, as defined in the Uncertificated
Securities Regulations 2001 (SI 2011/3755, as amended),
holding of shares in uncertificated form (in respect of
which Euroclear UK &amp; Ireland Limited is the operator)"Daily
the daily record setting out the prices of all trades in
Official      shares and other securities conducted on the London Stock
List"         Exchange, published by the London Stock Exchange"Dealing
Disclosure""Effective"   the Scheme having become effective pursuant to its
terms"Effective    the date on which the Scheme becomes effective in
Date"         accordance with its terms"Forms of     the forms of proxy for
Proxy"        Meeting"FSA"         the United Kingdom Financial Services
Authority and any
successor or replacement regulatory body or bodies"FSMA"
the Financial Services and Markets Act 2000 and any
subordinate legislation made under it, or any applicable
successor or replacement regulatory regime in the UK"General
the general meeting of Valiant Shareholders to be
Meeting"      convened in connection with the Scheme (including any
adjournment thereof)"Ithaca"      Ithaca Energy Inc."Ithaca
Bidco""Ithaca       the Ithaca Shares to be issued pursuant to the
Consideration Acquisition
Shares""Ithaca       Ithaca and its subsidiary undertakings
Group""Ithaca       common shares in the capital of Ithaca, without nominal
Shares"       or par value"kboe/d"      thousand barrels of oil equivalent
per day"Licensee"    means any member of the Valiant Group that, as at the
date of this announcement, is the legal or beneficial
owner of the rights under any exploration or production
licence issued by the granting authority of Norway"London
Stock London Stock Exchange plc
Exchange""LTIP"        the Valiant Petroleum Long-Term Incentive
Plan"MMboe"       millions barrels of oil equivalent"MMboe/d"     millions
barrels of oil equivalent per day"MMstb"       million stock tank
barrels"Morgan       Morgan Stanley &amp; Co. Limited
Stanley""Opening      has the same meaning as in Rule 8 of the Code
Disclosure""Option       the Valiant Petroleum Limited Share Option Scheme
Schemes"      (including the terms of the Enterprise Management
Incentive agreements and the terms of the unapproved
agreements), the Valiant Petroleum plc Share Option
Scheme and the Valiant Petroleum plc Non-Executive Share
Option Scheme"Oriel"       Oriel Securities Limited"Overseas
Scheme Shareholders who are resident in, ordinarily
Shareholders" resident in, or citizens of, jurisdictions outside the
United Kingdom"Panel"       the Panel on Takeovers and
Mergers"Registrar of the Registrar of Companies in England and Wales
Companies""Regulatory   any information service authorised from time to
Information   the FSA for the purpose of disseminating regulatory
Service"      announcements"Restricted   any jurisdiction where local laws
or regulations may
Jurisdiction" result in a significant risk of civil, regulatory or
criminal exposure if information concerning the
Acquisition is sent or made available to Valiant
Shareholders in that jurisdiction"Scheme"      the scheme of
arrangement proposed to be made under Part
26 of the Companies Act between Valiant and the Scheme
Shareholders in connection with the Acquisition, the full
terms of which will be set out in the Scheme Document,
with, or subject to, any amendment, modification or
condition which Valiant and Ithaca Bidco agree, and if
required, the Court may approve or impose"Scheme       the
formal document to be sent to Valiant Shareholders
Document"     containing, among other things, the Scheme, the terms and
conditions of the Acquisition and the notices convening
the Court Meeting and General Meeting"Scheme
anticipated to be 6.00 p.m. on the Business Day
Record Time"  immediately preceding the date of the Court Hearing"Scheme
Shareholders""Scheme       Valiant Shares:
c. in issue as at the date of the Scheme Document and
which remain in issue at the Scheme Record Time;
d. (if any) issued after the date of the Scheme
Document and prior to the Scheme Voting Record Time and
which remain in issue at the Scheme Record Time; or
e. (if any) issued at or after the Scheme Voting
Time but at or prior to the Scheme Record Time either on
terms that the original or any subsequent holders thereof
shall be bound by the Scheme and/or in respect of which
the original or any subsequent holders thereof are, or
shall have agreed in writing to be, bound by the Scheme,
case, which remain in issue at the Scheme Record Time
in each case, excluding any Valiant Shares of which any
member of the Ithaca Group is the holder or in which any
member of the Ithaca Group is beneficially interested"Scheme
the time and date specified in the Scheme Document by
Voting Record reference to which entitlement to vote on the Scheme will
Time"         be determined"SVT"         the petroleum receiving,
treatment, storage and tanker
loading complex located at Sullom Voe, Shetland"Takeover
has the meaning given to it in Part 28 of the Companies
Offer"        Act"UK" or       the United Kingdom of Great Britain and
Northern Ireland"United
Kingdom""US" or       the United States of America, its territories
and"United       possessions, any state of the United States of America,
States"       the District of Columbia, and all other areas subject to
its jurisdiction"Valiant"     Valiant Petroleum plc"Valiant
the board of directors of Valiant
Board""Valiant      Kevin Lyon (Non-Executive Chairman), Mark Lewis (Chief
Directors"    Financial Officer), Sandy Shaw (Director Corporate &amp;
Commercial), Paul Mann (Chief Operating Officer), Michael
Bonte-Friedheim (Non-Executive Director and Acting Chief
Executive Officer), Jannik Lindbaek (Non-Executive
Director), Philip Vingoe (Non-Executive Director) and
Steve Horton (Non-Executive Director) and "Valiant
Director" means any one of them, but does not include
Peter Buchanan (Chief Executive Officer)"Valiant      Valiant
Group""Valiant      net production attributable to the Valiant Group at the
Production"   SVT (as allocated under the relevant SVT tariff agreement
and evidenced by relevant daily SVT production reports)
from the Dons fields facilities and the Causeway fields
facilities"Valiant      holders of Valiant Shares
Shareholders""Valiant      the LTIP and the Option Schemes
Schemes""Valiant      ordinary shares of GBP0.02555556 each in the capital
Shares"       Valiant
All references to "pounds", "pounds Sterling", "Sterling", "GBP","pence",
"penny" and "p" are to the lawful currency of the United
All references to "C$" and "Canadian Dollars" are to the lawful
currency of Canada.
All references to "US$" and "US Dollars" are to the lawful currency of
Unless otherwise stated, all times referred to in this announcement are
references to the time in London.
Any reference to any provision of any legislation shall include any
amendment, modification, re-enactment or extension thereof.
Reference to the singular shall include the plural and vice versa.
Published March 1, 2013  Reads 452 Copyright © 2013 SYS-CON Media, Inc. — All Rights Reserved.
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