Merger discussions between Western Canadian Coal Corp. and Cambrian Mining Plc
Not for release, publication or distribution in whole or in part into any jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. This announcement does not constitute an announcement of a firm intention to make an offer under Rule 2.5 of the City Code on Takeovers and Mergers ("UK Takeover Code") and there can be no certainty that any offer to acquire Cambrian Shares, as defined below, will ultimately be made, even if the pre-conditions are satisfied or waived. Any offer will be subject to the UK Takeover Code.
SUMMARY OF PROPOSAL
Under the Proposal holders of ordinary shares of
The Proposal values the entire issued ordinary share capital of Cambrian at approximately 28.8 million pnds stlg and each Cambrian Share at
Cambrian currently holds 72.3 million Western Shares and
RATIONALE FOR THE PROPOSAL The proposed business combination would result in a company with a diversified portfolio of assets, including: - 100% ownership of three coal mines and two wash plants in North Eastern British Columbia (Canada) with reported production for the year ended 30 June 2008 of 2.8 million tonnes of metallurgical coal; - 100% ownership of two coal mines and two wash plants in West Virginia (USA) with reported production for the year ended 30 June 2008 of 0.4 million short tons of metallurgical coal and 0.6 million short tons of thermal coal; - The combined entity has future coal production potential of up to 10 million tonnes per annum from existing assets; - 50.6% interest in Energybuild Group plc (AIM: EBG), an AIM traded company with reported production for the year ended 30 June 2008 of 0.1 million tonnes of thermal coal and sized coal in Wales (UK); - 20% interest in NEMI Northern Energy & Mining Inc. (TSX: NNE.A); - 100% ownership of a gold and antimony mine in Victoria (Australia) with reported production for the year ended 30 June 2008 of 7,550 ounces of gold and 920 tonnes of antimony; and - 45% interest in Xtract Energy Plc (AIM: XTR), an AIM traded company which identifies and invests in a diversified portfolio of early stage energy sector technologies and businesses. PRE-CONDITIONS OF THE PROPOSAL The making of any offer under the Proposal is subject to, inter alia, the following pre-conditions: (i) the satisfactory completion of confirmatory due diligence (including technical, legal, tax and financial) by the boards of both Cambrian and Western on each other's respective assets; (ii) the refinancing of the existing indebtedness of the Cambrian group with Investec, to Western's satisfaction; (iii) Western and/or Cambrian (as the case may be) obtaining any consents required under any existing contractual arrangements or otherwise (including shareholder, regulatory and bank consents), to Western's satisfaction; (iv) irrevocable undertakings to support and/or to accept any such offer in a form satisfactory to Western being received in respect of not less than a percentage to be agreed between Western and Cambrian of the issued share capital of Cambrian; (v) each Cambrian director providing an irrevocable undertaking in a form satisfactory to Western, in respect of his or her shareholdings, to support and to accept any such offer; (vi) a unanimous recommendation from the Cambrian Board that Cambrian Shareholders accept any such offer; and (vii) since 30 June 2008, and save as otherwise disclosed prior to the date of this letter, no event, change or condition having occurred or become known to Western where that would have or could be reasonably expected to have a material adverse effect on the business, assets, liabilities, trading or financial position, profitability or prospects of Cambrian. The Board of Western reserves the right to: (i) vary the form and/or mix of consideration in respect of any such offer that may be made; (ii) waive any of the pre-conditions to the making of any such offer; (iii) (with the consent of the Panel) apply additional pre-conditions to the making of any such offer; and (iv) structure any transaction to implement any such offer by way of a scheme of arrangement or a takeover offer.
The pre-conditions must be satisfied or waived before an offer can be made.
This announcement does not amount to a firm intention to make an offer and, accordingly, there can be no certainty that any offer will be made even if the pre-conditions are satisfied or waived.
This announcement does not constitute an announcement of a firm intention to make an offer under Rule 2.5 of the UK Takeover Code and there can be no certainty that any offer to acquire Cambrian Shares will ultimately be made, even if the pre-conditions are satisfied or waived.
The Directors of Cambrian accept responsibility for the information contained in this announcement. To the best of the knowledge and belief of the Directors of Cambrian (who have taken all reasonable care to ensure that such is the case), the information relating to Cambrian contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information.
Teathers, which is a trading name of Straumur-Burdaras Investment Bank hf. (“Teathers”) which is a public limited company, listed in
The Directors of Western accept responsibility for the information contained in this announcement. To the best of the knowledge and belief of the Directors of Western, (who have taken all reasonable care to ensure that such is the case), the information not relating to Cambrian contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information.
Cenkos Securities plc (“Cenkos”), is acting for Western and no one else in connection with the matters described in this announcement and will not be responsible to anyone other than Western for providing the protections afforded to customers of Cenkos nor for providing advice in relation to the matters referred to in this announcement.
Disclosure in accordance with Rule 2.10 of the UK Takeover Code
In accordance with Rule 2.10 of the UK Takeover Code, Western confirms that it has 209,715,935 common shares each without par value in issue. The ISIN code for the shares is CA9578601093.
In addition, Western has 70,938 debentures due
Western also has a loan due
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the UK Takeover Code, if any person is, or becomes, “interested” (directly or indirectly) in 1% or more of any class of “relevant securities” of Western or of Cambrian, all “dealings” in any “relevant securities” of that company (including by means of an option in respect of, or a derivative referenced to, any such “relevant securities”) must be publicly disclosed by no later than
Under the provisions of Rule 8.1 of the UK Takeover Code, all “dealings” in “relevant securities” of Western or of Cambrian by Western or Cambrian, or by any of their respective “associates”, must be disclosed by no later than 12.00 noon (
A disclosure table, giving details of the companies in whose “relevant securities” “dealings” should be disclosed, and the number of such securities in issue, can be found on the Takeover Panel’s website at www.thetakeoverpanel.org.uk.
“Interests in securities” arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an “interest” by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the UK Takeover Code, which can also be found on the Panel’s website. If you are in any doubt as to whether or not you are required to disclose a “dealing” under Rule 8, you should consult the Panel.
The Board of Directors of Western has established a special committee (the “Western Committee”) of directors that are independent of Cambrian to consider, negotiate and make a recommendation regarding the transaction to the Western board of directors. The Western Committee has engaged Cormark Securities Inc. to provide it with financial advice with respect to the transaction, including formal valuations of Western and Cambrian. Cenkos Securities plc is the Company’s nominated advisor (NOMAD), broker and financial advisor. Lawson Lundell LLP and Reynolds Porter Chamberlain LLP are acting as external legal counsel to Western. Fraser Milner Casgrain LLP is acting as legal counsel to the Western Committee.
The Board of Directors of Cambrian has established an independent committee (“Cambrian Committee”) of directors that are independent of Western to consider, negotiate and make a recommendation regarding the transaction to Cambrian’s Shareholders. The Cambrian Committee has engaged Teathers (the Company’s nominated advisor (NOMAD)) to provide it with financial advice with respect to the transaction, including formal valuations of Western and Cambrian. Goodmans LLP in
About Cambrian Mining Plc
Cambrian Mining Plc is a diversified mining group, headquartered in
About Western Canadian Coal Corp
Western Canadian Coal Corp. produces high quality metallurgical coal from mines located in north eastern
Note: One tonne (metric) is 1,000 kg. One ton (short) is 907.2 kg. Therefore, one tonne is approximately one ton multiplied by 1.102.
This news release contains “forward-looking information” within the meaning of applicable securities laws. Forward-looking information includes, but is not limited to, information concerning the proposed business combination between Western and Cambrian and matters relating thereto. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “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”. Forward-looking information is based on the opinions and estimates of management at the date the information is made, and is based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Assumptions upon which such forward-looking information is based include, without limitation, that the shareholders of Western and Cambrian will approve the Proposal, that all required third party, court, regulatory and governmental approvals to the Proposal will be obtained and all other conditions to the making of any offer and/or the completion of the Proposal will be satisfied or waived. Many of these assumptions are based on factors and events that are not within the control of Western and Cambrian and there is no assurance they will prove to be correct. Factors that could cause actual results to vary materially from results anticipated by such forward-looking information include changes in market conditions, variations in coal recovery rates, risks relating to international operations, fluctuating coal prices and currency exchange rates, changes in project parameters, the possibility of project cost overruns or unanticipated costs and expenses, labour disputes and other risks of the mining industry, failure of plant, equipment or processes to operate as anticipated, the business of the companies not being integrated successfully or such integration proving more difficult, time consuming or costly than expected as well as those risk factors discussed in the Annual Information Form for the year ended
SOURCE Western Canadian Coal Corp.