EMBER RESOURCES INC. ANNOUNCES INCREASED CASH AND SHARE PROPOSAL TO ACQUIRE ALL OF THE OUTSTANDING SHARES OF CORDERO ENERGY INC.
CALGARY, ALBERTA. June 6, 2008. Ember Resources Inc. (TSX: EBR) ("Ember") announced today that it has provided Cordero Energy Inc. (TSX: COR) ("Cordero") with a further formal proposal to acquire all of the outstanding common shares ("Cordero Shares") of Cordero for increased consideration of $5.35 per Cordero Share, payable at the election of each Cordero shareholder, in cash or 2.61 common shares of Ember ("Ember Shares") at a deemed price of $2.05 per Ember Share.
The cash portion of the proposal payable to the Cordero shareholders will total an aggregate of $55 million. In the event that the Cordero shareholders elect, in the aggregate, to receive more than $55 million in cash, the amount of cash to be received by a holder electing to receive cash with respect to a Cordero Share will be reduced proportionately and the balance of the purchase price for that Cordero Share will be paid by a portion of an Ember Share at a deemed price of $2.05 per Ember Share. In the event that the Cordero shareholders elect, in the aggregate, to receive less than $55 million in cash, the number of Ember Shares to be received by a holder electing to receive Ember Shares with respect to a Cordero Share will be reduced proportionately and the balance of the purchase price for that Cordero Share will be paid by in cash.
The value under the proposal of $5.35 per Cordero Share represents a premium of 13% over the outstanding cash offer of $4.75 cash per Cordero Share made by ENMAX Acquisition Corp. (the "Enmax Offer").
The proposal calls for the acquisition to be completed by way of a plan of arrangement under the Business Corporations Act (Alberta) and for the execution of a definitive arrangement agreement by June 16, 2008. The arrangement would require court approval and the approval of the holders of 66 2/3% of the Cordero Shares who vote at a special meeting of the holders called by Cordero to consider the transaction. The arrangement would be subject to a number of additional conditions typical to transactions of such a nature, including all applicable regulatory approvals.
To fund a portion of the cash component of the proposal, Ember has entered into subscription agreements which provide for the issuance of 21,951,221 subscription receipts (“Subscription Receipts”) at a price of $2.05 per Subscription Receipt for total proceeds of $45 million. The balance of the cash component will be paid out of Ember's existing credit facilities which were recently expanded to $35 million. Each Subscription Receipt will be convertible into one Ember Share upon the completion of the arrangement with Cordero. The issuance of the subscription receipts will occur prior to the completion of the arrangement. The subscription receipt financing would require the approval of the Ember shareholders at a meeting held prior to the completion of the arrangement.
Ember has received commitment letters from shareholders representing an aggregate of 12,396,196 Cordero Shares, or approximately 33.4% of the outstanding Cordero Shares, pursuant to which such holders have agreed, subject to certain terms and conditions or to the receipt of a superior offer, to support Ember's acquisition of the Cordero Shares and not tender their Cordero Shares to the Enmax Offer which expires on Friday, June 13, 2008.
The combination of Ember and Cordero would result in a highly focused and growth oriented coal bed methane (CBM) Resource Company in a natural gas pricing environment that has seen dramatic improvements over the last three months. Combining the two CBM companies would result in an excellent geographic fit of complementary assets.
Key attributes of the combined Company would be as follows;
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FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements including expectations of future production, cash flow and earnings. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ from those anticipated. These risks include, but are not limited to: the risks associated with the oil and gas industry (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price and exchange rate fluctuation and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Additional information on these and other factors that could affect the Company’s operations or financial results are included in the Company’s reports on file with Canadian securities regulatory authorities.
Ember Resources Inc. is a resource company specializing in coal bed methane (CBM) with extensive land and resource holdings in Alberta, Canada. Ember’s shares are traded on the Toronto Stock Exchange under the trading symbol “EBR”.
FOR FURTHER INFORMATION PLEASE CONTACT
Mr. Douglas A. Dafoe
President & C.E.O.
Ember Resources Inc.
Telephone: 403 270-0803
Facsimile: 403 270-2850
Mr. Terry S. Meek
Executive Vice President & C.O.O.
Ember Resources Inc.
Telephone: 403 270-0803
Facsimile: 403 270-2850
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