Transmeridian Exploration Incorporated and Trans Meridian International, Inc. (TMI), a British Virgin Islands company formed by the Company's Chairman and Chief Executive Officer Lorrie T. Olivier, have entered into a definitive merger agreement pursuant to which TMI, through a wholly owned subsidiary, will commence a tender offer to purchase all of the Company's outstanding shares of common stock for a price of $3.00 per share, payable net to the seller in cash.
The purpose of the tender offer is to acquire for cash as many outstanding shares as possible of the Company's common stock as a first step in a ``going private'' transaction resulting in TMI acquiring the entire equity interest in the Company. If the transaction is completed, TMI contemplates that the shares of the Company's common stock would be delisted from trading on the AMEX and deregistered with the Securities and Exchange Commission.
The $3.00 per share cash consideration represents a 114% premium over the $1.40 closing price of the Company's common stock on December 28, 2007, the last full trading day prior to announcement of the transaction, and implies an enterprise value of the Company of approximately $825 million. The Company's disinterested directors have unanimously approved the merger agreement and tender offer and will recommend that the Company's stockholders tender their shares into the offer and vote for the back-end merger, if required.
Commencement of the tender offer is conditioned on adequate financing having been made available to TMI and its acquisition subsidiary. The closing of the tender offer is subject to other terms and conditions customary for transactions of this type, including that the Company's stockholders shall have tendered a number of shares into the offer that, when added to the shares of common stock owned by TMI and its affiliates, including Mr. Olivier and his family interests, represents at least a majority of the shares of the Company's common stock, calculated on a fully diluted basis. Upon completion of the tender offer, subject to any requisite stockholder approval, TMI's acquisition company will be merged with and into the Company, and stockholders will receive the same per share cash consideration as was paid to holders in the tender offer.
The merger agreement permits the Company to solicit competing offers for the acquisition of the Company until the financing condition to TMI's obligation to commence the tender offer is satisfied. If at any time the Company receives a competing offer that the Board determines to be a "superior proposal,'' the Company may terminate the merger agreement and accept the proposal without being required to pay TMI any termination or "break-up'' fee, other than reimbursement of TMI's expenses of up to $3,000,000. The Company also has the right to terminate the merger agreement without liability to TMI at any time after January 31, 2008 if the financing condition remains unsatisfied as of such time, and TMI may terminate the merger agreement at any time after February 29, 2008 if this condition is not satisfied at such time, in either of which cases TMI would incur no liability to the Company.
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