May 08 - Saxon Enters Into Arrangement Agreement

Source Company Web Site
Company Sword Canada Acquisition CorporationFirst Reserve CorporationSchlumberger 
Tags Deals, Oil Services
Date May 05, 2008

Saxon Energy Services Inc. ("Saxon") (TSX: SES) announces that on May 4, 2008 it entered into an arrangement agreement (the "Arrangement Agreement") with Sword Canada Acquisition Corporation ("Sword"), an acquisition company indirectly jointly owned by  Schlumberger Limited ("Schlumberger") and investment funds affiliated with  First Reserve Corporation ("First Reserve") in which certain members of Saxon's current management will have an equity position. Pursuant to the Arrangement Agreement, Sword will acquire all of the issued and outstanding common shares of Saxon (the "Saxon Shares") (other than certain shares held by participating members of management) by way of a plan of arrangement under the Business Corporations Act (Alberta) for Cdn$7.00 per Saxon Share (the "Arrangement"). Saxon had previously announced that it was in exclusive discussions with  Schlumberger and First Reserve.

The negotiation of the transaction was supervised by an independent special committee (the "Special Committee") of the Board of Directors of Saxon (the "Saxon Board"). The Arrangement has been unanimously approved by the Saxon Board based on the unanimous recommendation of the Special Committee and the Saxon Board unanimously recommends that shareholders vote in favour of the transaction. Thomas Weisel Partners Canada Inc., the exclusive financial advisor to Saxon, has provided the Saxon Board with its opinion that, as of the date hereof, the consideration to be received by Saxon's shareholders pursuant to the proposed Arrangement is fair from a financial point of view. All of the members of the Saxon Board and Saxon's senior officers and certain related shareholders, who collectively own approximately 14 percent of the outstanding Saxon Shares, have agreed to vote their shares in favour of the Arrangement.

The Arrangement is subject to a number of conditions including, but not limited to, the approval of at least 66 2/3% of the votes cast in person or by proxy at a special meeting of Saxon's shareholders, as well as court and regulatory approvals and other customary conditions. The special meeting is expected to be held in mid-July.

Saxon has agreed that it will not solicit or initiate any discussions concerning the pursuit of any other acquisition proposal. Saxon has also agreed to pay a termination fee in an amount equal to $17.3 million to Sword in certain circumstances. In addition, Sword has the right to match any competing proposal for Saxon in the event such a proposal is made.

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