All directors and senior officers of Winstar, certain investment funds administered by Yorktown Partners Group ("Yorktown"), the principals of Yorktown and Pala Assets Holdings Limited ("Pala"), collectively representing approximately 54.2% of the issued and outstanding shares of Winstar, have committed to vote all Winstar shares beneficially owned or controlled by them in favour of the Acquisition, subject to the terms and conditions of the support agreements entered into with KOV in support of the Acquisition.
All directors and senior officers of Winstar, Pala and the Yorktown principals, who collectively hold 27.9% of the issued and outstanding shares of Winstar, will elect to receive the Share Consideration.
The investment funds administered by Yorktown, which collectively hold approximately 26.3% of the issued and outstanding shares of Winstar, will elect to receive the Cash Consideration.
Additional Terms of the Arrangement Agreement
Pursuant to the Arrangement Agreement, Winstar will call a meeting of its shareholders to consider and approve the plan of arrangement implementing the Acquisition, such meeting is expected to be held in mid-June 2013. It is expected that the information circular relating to the Acquisition will be mailed to Winstar shareholders in May 2013 and that, subject to the satisfaction, or where relevant waiver, of all relevant conditions, the Arrangement will become effective and the Acquisition completed by the end of June 2013.
The Acquisition is subject to a number of customary conditions, including the receipt of approval by 66 2/3% of the votes cast by Winstar shareholders in person or by proxy at a special meeting of Winstar shareholders, receipt of approval by the Court of Queen's Bench of Alberta and receipt of stock exchange approvals.
Non-Solicitation Agreement and Termination Fees
The Arrangement Agreement includes customary non-solicitation covenants by Winstar and provides Winstar with the ability to respond to unsolicited proposals considered superior to the Acquisition in accordance with the terms of the Arrangement Agreement. In the event a superior proposal is accepted, Winstar will be required to pay a termination fee of C$4.5 million to KOV. KOV has the right to match a superior proposal. In the event KOV fails to satisfy its obligations under the Arrangement Agreement and complete the Acquisition, KOV will be required to pay a reverse termination fee of C$4.5 million to Winstar.
Macquarie Capital (Europe) Limited is acting as exclusive financial advisor to KOV in connection with the Acquisition.
KOV is an international upstream oil and gas exploration and production company with a diversified portfolio of projects in Ukraine, Brunei and Syria and with a risk profile ranging from exploration in Brunei and Syria to production and development in Ukraine. The common shares of the Company trade on the Warsaw Stock Exchange under trading symbol "KOV".
In Ukraine, KOV owns an effective 70% interest in KUB-Gas LLC. The assets of KUB-Gas LLC consist of 100% interests in five licences near to the City of Lugansk in the northeast part of Ukraine. Four of the licences are gas producing.
In Brunei, KOV owns a 90% working interest in a production sharing agreement which gives the Company the right to explore for and produce oil and natural gas from Block L, a 1,123 square kilometre area covering onshore and offshore areas in northern Brunei.
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