TORONTO, ONTARIO and EDMONTON, ALBERTA -- (Marketwired) -- 07/05/13 -- Melior Resources Inc. (TSX VENTURE: MLR) ("Melior") and Firestone Ventures Inc. (TSX VENTURE: FV) (FRANKFURT: F5V) ("Firestone") announced today that they have entered into a letter of intent (the "Letter of Intent") in connection with a proposed transaction (the "Proposed Transaction") pursuant to which Melior would acquire all of the issued and outstanding common shares of Firestone in consideration for the issuance to Firestone shareholders of one Melior common share for each 2.895 Firestone common shares held. The Proposed Transaction is subject to a number of conditions, including confirmatory due diligence by Melior and the negotiation of mutually satisfactory definitive acquisition documentation. There can be no assurance that any such definitive documentation will be entered into or that the Proposed Transaction will be completed. Melior and Firestone also announced today that Melior has agreed to provide Firestone with a bridge loan (the "Bridge Loan") of up to C$500,000.
Pursuant to the terms of the Proposed Transaction, Firestone shareholders would receive one Melior common share for each 2.895 Firestone common shares held. Based on Melior's unaudited net asset value per share as of June 30, 2013, this represents a premium of 45.7% to the volume weighted average price of Firestone's common shares for the 20 trading days preceding the date of this release. Melior's net assets consist of cash, liquid securities (valued at the volume weighted average price of those securities for the 20 trading days preceding the date of this release) and other working capital (for example, pre-payments and accounts payable). It is currently anticipated that the Proposed Transaction would be completed pursuant to a plan of arrangement under the provisions of the Business Corporations Act (Alberta).
Firestone has granted Melior a three-month period of exclusivity to complete its confirmatory due diligence and negotiate definitive acquisition agreements. Conditions to entering into definitive agreements include the approval of the boards of directors of Melior and Firestone, satisfactory completion of confirmatory due diligence review by each of Melior and Firestone and execution of support agreements by each of the directors and officers of Firestone together with Firestone common shareholders who collectively hold at least 33.33% of the issued and outstanding Firestone common shares. To date shareholders of Firestone holding approximately 41.6% of Firestone's issued and outstanding common shares have agreed to vote in favour of, or tender to, as the case may be, the Proposed Transaction. The Board of Directors of Firestone has engaged Paradigm Capital Inc. ("Paradigm Capital") as financial advisor in connection with the Proposed Transaction. Paradigm Capital has provided the Board of Directors of Firestone with an opinion that, as of the date of the opinion and based on and subject to the assumptions, limitations and qualifications stated at the time of delivering such opinion, the consideration to be received by Firestone shareholders under the Proposed Transaction is fair, from a financial point of view. Accordingly, the Board of Directors of Firestone is recommending the Proposed Transaction.
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