23 June 2015, Lagos – Toronto-listed Canadian independent, Mart Resources has granted an extension of the deadline for its acquisition by Midwestern Oil and Gas from June 15, 2015 to July 26, 2015, in accordance with the request of the Nigerian independent.
The Canadian firm had in March 2015 announced that it had entered into a letter of intent with the Nigerian independent, which is the operator of and one of Mart’s co-venturers in the Umusadege oilfield.
The letter of intent sets out the intention of Mart Resources and Midwestern on a non-binding basis, to use good faith efforts to negotiate and enter into a definitive agreement.
Under the definitive agreement, Midwestern would agree to acquire all of the issued and outstanding shares of Mart for cash consideration of CAD$0.80 (Canadian dollar) per common share by way of a plan of arrangement.
Midwestern had agreed to use reasonable commercial efforts to satisfy the financing condition of the $400 million deal on or prior to June 15, 2015 and to keep Mart informed as to the status and timing of the satisfaction of the financing condition.
The letter of intent contemplates that the definitive agreement will obligate Midwestern to provide evidence satisfactory to Mart that written binding commitments have been entered into with investors in the proposed financing on or before May 15.
But Mart Resources said in a release at the weekend that both parties had jointly agreed to amend the terms of the arrangement agreement of March 15, 2015 in order to facilitate Midwestern’s ongoing financing and satisfaction of the financing condition.
According to the company, Midwestern has informed Mart that it was seeking an extension of the June 15, 2015 deadline provided for in the Arrangement Agreement for completion of the financing.
Mart noted that its Board of Directors received a comprehensive update on the status of the Midwestern Financing and was satisfied that, given the progress that had been made and the parties involved, it was appropriate to grant the requested extension.
“The Amending Agreement gives Midwestern until July 26, 2015 to complete the Midwestern Financing. Mart and Midwestern have agreed to continue to use their reasonable commercial efforts to complete the transaction by July 16, 2015. If Midwestern has not completed the Midwestern Financing by July 26, 2015, Mart is able to terminate the Arrangement Agreement and compel Midwestern to provide to Mart the benefit of the CAD$5.8 million reverse break fee contemplated by the Arrangement Agreement,” said the release.
Mart’s board had also approved the letter of intent and negotiation of a definitive agreement. The parties had agreed, on a binding basis, to a period of exclusivity commencing on February 27, and which ended on March 15, during which Mart was expected not to solicit a proposal that might be competitive with the proposed transaction.
During this period also, Mart and Midwestern were expected to use good faith efforts to finalise the terms of the definitive agreement.
Midwestern had advised Mart that its ability to complete the proposed transaction was subject to completing a private placement financing.
– This Day