CALGARY, Dec. 21, 2015 /CNW/ - Ironhorse Oil &
Gas Inc. ("Ironhorse" or the "Company") (TSX-V:IOG), advises its
shareholders to take no action in response to the extension of
1927297 Alberta Ltd.'s (the "Offeror") hostile bid to acquire the
common shares ("Common Shares") of Ironhorse at $0.17 per share in cash (the "Offer"). The
Offer, as extended, will expire on February
5, 2016. The Offer remains the same, aside from the
extension to February 5, 2016.
The Offer significantly undervalues Ironhorse's assets and growth
potential. Recent statements made by the Offeror are merely
an attempt to conceal the inadequacies of its substantially
undervalued, opportunistic and predatory bid for the Company.
The Offeror's Tactics to Conceal the Inadequacies of the
Bid:
- Inaccurate and misleading statements about our financial
advisor's opinion: The Offeror has made inaccurate and
misleading statements about the opinion provided by our financial
advisor to our board of directors (the "Board") and included in our
Directors' Circular dated November
19, 2015. As indicated in the opinion, our financial
advisor relied on financial statements subsequent to December 31, 2014, including draft interim
financial statements for the nine month period ended September 30, 2015 and management's discussion
and analysis related thereto. The Offeror's statement that
our financial advisor relied only on outdated financial statements
and management's discussion and analysis is clearly incorrect and
misleading to our shareholders. Furthermore, in assessing the
adequacy of the consideration under the Offer to our shareholders
our financial advisor mechanically rolled forward the reserves
evaluation to September 30, 2015,
utilized the strip pricing assumptions as at November 13, 2015, and made use of our actual
lease operating statements for 2015.
- Our directors' and officers' interests are clearly
aligned with shareholders: As a group, our directors
and officers hold over 14% of the Common Shares. Our
directors and officers interests to maximize shareholder value are
clearly well aligned with the interests of our shareholders.
The statement made by the Offeror that our Board is trying to
protect management from a change of control that would reduce their
compensation is misleading. The amounts paid to our officers
pursuant to our management agreement with Grizzly Resources Ltd.
are not significant and the Board believes that they have no impact
on our officers' interests in maximizing shareholder value.
The Board believes that it could not obtain replacement services at
similar cost under other arrangements. The misleading and
opportunistic actions of the Offeror are resulting in considerable
cost and diversion of resources, which the Board believes is not in
the interests of Shareholders.
- The Offer significantly undervalues Ironhorse's assets
and growth potential. The Board believes that the Offer
fails to adequately compensate shareholders for the value of
Ironhorse's assets, and if successful, would deprive shareholders
of Ironhorse's upside potential. The Board has determined
that the Offer is financially inadequate at current oil prices and
is an opportunistic attempt by the Offeror to acquire Ironhorse,
effectively using Ironhorse's own cash, at a low point in the
energy cycle when Ironhorse has no debt and significant value
appreciation with any oil price recovery.
- Superior proposals or other alternatives may
emerge. The special committee of the Board (the "Special
Committee") continues to work together with Ironhorse's management,
directors and advisors to evaluate a range of strategic
alternatives that may enhance shareholder value. The Board believes
that Ironhorse and its assets are potentially attractive to other
parties in addition to the Offeror. Alternatives may include, among
other things, a sale of the Company for cash and/or shares, asset
sales(s), a merger, a reorganization or partnering with a financial
or strategic investor. Tendering Common Shares into the Offer
before the Special Committee has had an opportunity to fully
explore all available alternatives to the Offer may preclude the
possibility of a financially superior alternative transaction
emerging.
The Facts About the Offer
Shareholders are reminded of the facts about the Offer:
- The Offer is not supported by Ironhorse's largest
shareholders or its directors and officers holding approximately
45% of the outstanding Common Shares
- The directors and officers of Ironhorse, together with a number
of shareholders (including certain of Ironhorse's largest
shareholders) have indicated to the Company that they intend to
reject the Offer. Such persons hold approximately 45% of the
outstanding Common Shares. Accordingly, management believes that
the Offer is unlikely to succeed under its current
conditions.
- The Offer is highly conditional and has substantial
completion risk.
- The Offer is highly conditional and has substantial completion
risk. Among the conditions to the Offer is the condition
that, together with Common Shares held by the Offeror and its
affiliates, at least 66⅔% of the outstanding Common Shares shall
have been deposited pursuant to the Offer. As stated above,
shareholders holding approximately 45% of the outstanding Common
Shares have indicated that they intend to reject the Offer.
Accordingly, the Offer is subject to substantial completion risk as
it is unlikely that all of the conditions to the Offer will be
satisfied.
- The amended Offer does not comply with the Shareholder
Rights Plan
- Since the amended Offer is only open for acceptance for 93
days, it is not a "Permitted Bid" under the Shareholder Rights Plan
adopted by Ironhorse, and the Offeror has chosen not to amend its
bid to become a Permitted Bid. The Shareholder Rights Plan is
consistent with the amendments to the Canadian take-over bid rules
proposed by the Canadian securities regulators to increase the
minimum amount of time that a take-over bid must remain open to 120
days.
If shareholders of Ironhorse have any questions or require more
information, they are encouraged to contact D.F. King Canada ("D.F. King"), a division of
CST Investor Services Inc., the information agent retained by
Ironhorse, by telephone at 1-800-294-3174 (Toll Free in
North America) or 1-201-806-7301
(Banks, Brokers and Collect Calls), or by email at
inquiries@dfking.com.
How to REJECT the Offer and Withdraw Tendered Shares
To reject the Offer, you should do nothing. The Offer is open
for acceptance until February 5,
2016, unless extended further. Shareholders who have already
tendered their Common Shares to the Offer can withdraw them at any
time before they have been taken up by the Offeror and in certain
other circumstances as further described under the heading "How to
Withdrawn Your Deposited Common Shares" in the Directors' Circular.
Shareholders holding shares through a dealer, broker or other
nominee should contact such dealer, broker or nominee to withdraw
their Common Shares. Shareholders may also contact D.F. King by telephone at 1-800-294-3174 (Toll
Free in North America) or
1-201-806-7301 (Banks, Brokers and Collect Calls), or by email at
inquiries@dfking.com.
If you have already tendered Common Shares to the Offer and you
decide to withdraw these Common Shares from the Offer, you must
allow sufficient time to complete the withdrawal process prior to
the expiry of the Offer.
Advisories
Forward-Looking Statements
This news release contains forward-looking information (as
defined in the Securities Act (Alberta)) and statements (collectively,
"forward-looking statements") that are based on expectations,
estimates and projections as of the date of this news release.
These forward-looking statements can often, but not always, be
identified by the use of forward-looking terminology such as
"plans", "predicts", "expects" or "does not expect", "is expected",
"budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates" or "does not anticipate", or "believes", or
variations of such words and phrases, or statements that certain
actions, events or results "may", "could", "would", "might" or
"will" be taken, occur or be achieved. Examples of such
forward-looking statements in this news release include, but are
not limited to, the growth potential of the Company; and whether or
not an alternative transaction superior to the Offer may emerge.
Actual results and developments are likely to differ, and may
differ materially, from those expressed or implied by the
forward-looking statements contained in this news release.
Forward-looking statements contained in this news release are based
on a number of assumptions that may prove to be incorrect,
including, but not limited to assumptions as to production,
operating expenses, capital expenditures and oil prices;
competitive conditions in the oil and gas industry; general
economic conditions; changes in laws, rules and regulations
applicable to Ironhorse; estimates of reserves; and whether or not
an alternative transaction superior to the Offer may emerge. In
addition to being subject to a number of assumptions,
forward-looking statements in this news release involve known and
unknown risks, uncertainties and other factors that may cause
actual results and developments to be materially different from
those expressed or implied by such forward-looking statements,
including, but not limited to: volatility of crude oil and natural
gas prices; the impacts of legislative and regulatory changes
especially those which relate to royalties, taxation and the
environment; various events which could disrupt operations;
operational issues and contractual issues; uncertainty of estimates
with respect to reserves; the supply and demand metrics for oil and
natural gas; the variances of stock market activities generally;
currency and interest rate fluctuations; Ironhorse's inability to
either generate sufficient cash flow from operations to meet its
current and future obligations or obtain external sources of debt
and equity capital; general economic, business and market
conditions; and such other risks and uncertainties identified in
the filings by Ironhorse with the Canadian provincial securities
regulatory authorities. The Board believes that the expectations
reflected in the forward-looking statements contained in this news
release are reasonable as at the date hereof, but no assurance can
be given that these expectations will prove to be correct. In
addition, although Ironhorse and the Board have attempted to
identify important factors that could cause actual actions, events
or results to differ materially from those described in
forward-looking statements, there may be other factors that cause
actions, events or results not to be as anticipated, estimated or
intended. Accordingly, you should not place undue reliance on any
forward-looking statements contained in this news release. Except
as required by law, neither the Board nor Ironhorse undertakes any
obligation to update publicly or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. The forward-looking statements contained in this news
release are expressly qualified by this cautionary
statement.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
SOURCE Ironhorse Oil & Gas Inc.