Savanna Energy reiterates rejection of offer from Total Energy
Savanna Energy Services Corp. announced that Western Energy Services Corp. has increased the consideration payable pursuant to its previously announced acquisition of common shares of Savanna, according to a press release.
It now includes the payment of $0.21 in cash per Savanna Share in addition to the 0.85 of a common share of Western payable for each outstanding Savanna Share.
The revised Western offer represents a premium to the Total offer of 14.8 per cent based on the volume weighted average trading price of the Western Shares and the common shares of Total Energy Services Inc. on the Toronto Stock Exchange for the ten day period ended March 14, 2017.
The new consideration reflects a price of $2.30 per Savanna Energy share based on the volume weighted average trading price of Western Shares on the TSX for the ten day period ended March 14, 2017 of $2.46.
This represents a premium of 14.3 per cent over Savanna’s volume weighted average trading price on the TSX for the same period of $2.01.
The consideration payable pursuant to the Total Offer reflects a price of $2.00 per Savanna Energy share based on the volume weighted average trading price of common shares of Total on the TSX for the ten day period ended March 14, 2017 of $13.85.
This represents a 0.5 per cent discount over Savanna’s volume weighted average trading price on the TSX for the same period of $2.01.
“This amendment with Western adds the certainty of cash value to what was already an excellent transaction for Savanna shareholders. The original transaction with Western was financially, strategically and operationally superior to the hostile offer from Total, and provided our shareholders a significantly greater ownership interest in what would be the second largest drilling contractor and second largest service rig contractor in Canada. The Revised Western Offer, which includes a firm $0.21 in cash per Savanna Share, equivalent to a 10.1 per cent increase in purchase price, is clearly superior to Total’s hostile offer. We look forward to completing this transaction,” said Chris Strong, CEO of Savanna.
The amending agreement also provides for an increase in the reciprocal non-completion fee by $5 million to $20 million.