Petro Andina's Board Rejects Pluspetrol's Offer
Petro Andina announced that its Board of Directors unanimously recommends that shareholders reject 1462627 Alberta Ltd's., a wholly-owned subsidiary of Pluspetrol Resources Corporation N.V., unsolicited offer (Pluspetrol Offer) to acquire Petro Andina. The Board, after a thorough review and evaluation of the June 19, 2009 unsolicited take-over bid and after consultation with its financial and legal advisors, determined that the Pluspetrol Offer is inadequate from a financial point of view. The Board therefore recommends that Petro Andina shareholders reject the Pluspetrol Offer and not tender their shares to the Pluspetrol Offer.
Among the reasons the Petro Andina Board believes shareholders should reject the Pluspetrol Offer are:
- The sum of the net present value of future net revenue from Petro Andina's proved plus probable oil and natural gas reserves in Argentina and Petro Andina's net working capital significantly exceeds the value of the Pluspetrol Offer before attributing any value to Petro Andina's Argentine Possible Reserves, Petro Andina's Argentine resource potential, Petroleum Plus benefits, significant synergies available to Pluspetrol and Petro Andina's interests in Colombia and Trinidad and Tobago.
- The Pluspetrol Offer is opportunistic in light of the timing of Petro Andina's resource development.
- Precedent transactions suggest that greater value should be obtained for Petro Andina shareholders.
- Research analysts suggest that the Pluspetrol Offer is inadequate.
- Superior alternatives delivering greater value for Petro Andina shareholders may emerge.
- Petro Andina's common shares are trading substantially above the $8.10 price offered in the Pluspetrol Offer.
- The Pluspetrol Offer is highly conditional and not a firm offer.
- Petro Andina's financial advisors have each delivered a written opinion that the Pluspetrol Offer is inadequate, from a financial point of view, to shareholders.
"This is an inadequate and opportunistic offer that fails to recognize the full value of Petro Andina," said Wayne Foo, President of Petro Andina.
The Board in consultation with its financial advisors, FirstEnergy Capital Corp. and Scotia Waterous Inc., has commenced an evaluation of various initiatives in the best interests of Petro Andina and its shareholders with the objective of maximizing value for shareholders. The financial advisors have established data rooms in Calgary, Houston, and Buenos Aires, which are being made available to qualifying companies.
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