AXC Addax Petroleum

 

TIDMAXC 
 
RNS Number : 4085U 
Addax Petroleum Corporation 
24 June 2009 
 

 
 
 
ADDAX PETROLEUM ANNOUNCES C$52.80 PER SHARE CASH OFFER BY SINOPEC INTERNATIONAL 
PETROLEUM EXPLORATION AND PRODUCTION CORPORATION 
 
 
Calgary, June 24, 2009 /CNW/ - Addax Petroleum Corporation ("Addax Petroleum" or 
the "Corporation") (TSX: AXC and LSE: AXC) announced today that it has entered 
into a definitive agreement (the "Support Agreement") with Sinopec International 
Petroleum Exploration and Production Corporation ("SIPC") pursuant to which SIPC 
has agreed, subject to the terms of the Support Agreement, to make an offer to 
acquire all of the outstanding common shares of Addax Petroleum by way of a 
negotiated take-over bid (the "Offer") for C$52.80 per common share in cash. The 
Offer represents a 47% premium to the closing market price on the TSX of the 
Addax Petroleum common shares on June 5, 2009, the day prior to Addax 
Petroleum's public announcement that it was in preliminary discussions with 
parties regarding a potential transaction.  SIPC is a wholly owned subsidiary of 
China Petrochemical Corporation ("Sinopec Group") and undertakes overseas 
investments and operations in the upstream oil and gas sector.  Sinopec Group is 
China's largest producer and supplier of oil products and major petrochemical 
products. 
The Support Agreement provides for, among other things, customary provisions 
relating to support of Addax Petroleum's board of directors, non-solicitation 
and right to match covenants in favour of SIPC and the payment to SIPC of a 
termination fee of C$300 million if the acquisition is not completed in certain 
specified circumstances.  The obligation of SIPC to take up and pay for Addax 
Petroleum common shares pursuant to the Offer is also subject to the receipt of 
certain approvals from the Government of The People's Republic of China. SIPC 
has agreed to pay a break-up fee of C$300 million in the event that all 
approvals required to be obtained by SIPC from the Government of The People's 
Republic of China have not been obtained by August 24, 2009 and Addax Petroleum 
elects to terminate the Support Agreement.  The acquisition of the Addax 
Petroleum common shares is not conditional on financing. 
In connection with the Offer, AOG Holdings BV, a wholly owned subsidiary of the 
Addax & Oryx Group Ltd, and Jean Claude Gandur, President and Chief Executive 
Officer of Addax Petroleum, have each entered into lock-up agreements with SIPC 
pursuant to which they have agreed to, among other things, tender their Addax 
Petroleum common shares to the Offer. Addax Petroleum's other senior officers 
and directors will also enter into lock-up agreements. The total lock-up 
agreements represent approximately 38% of outstanding Addax Petroleum common 
shares (calculated on a fully-diluted basis). 
The Support Agreement also provides that if SIPC acquires not less than 66?% of 
the outstanding Addax Petroleum common shares under the Offer, SIPC will comply, 
or cause Addax Petroleum to comply, with the terms of the 3.75% convertible 
notes of Addax Petroleum due May 31, 2012. 
Addax Petroleum's board of directors, after consulting with its financial and 
legal advisors, has unanimously determined that the Offer is fair to the holders 
of Addax Petroleum common shares and is in the best interests of Addax Petroleum 
and has recommended acceptance of the Offer by holders of Addax Petroleum common 
shares. RBC Capital Markets, the financial advisor to Addax Petroleum's board of 
directors, has provided an opinion that the consideration to be received by the 
holders of Addax Petroleum common shares under the Offer is fair, from a 
financial point of view, to such holders. 
Commenting, Addax Petroleum's President and Chief Executive Officer, Jean Claude 
Gandur, said: "We are pleased that Sinopec has recognised the highly attractive 
asset portfolio and exceptional team that we have assembled at Addax Petroleum. 
The efforts and accomplishments that Addax Petroleum has achieved thus far will 
be built on through increased investment in the business and acceleration of 
development and exploration plans. While Addax Petroleum will cease to be a 
publicly traded company, we look forward to continuing our business in the 
countries in which we operate for the benefit of all stakeholders." 
Formal documentation relating to the take-over bid is expected to be mailed by 
SIPC in early July 2009. The Offer will be open for acceptance for a period of 
not less than 35 days and will be conditional upon, among other things, valid 
acceptance of the Offer by Addax Petroleum shareholders owning not less than 66 
2/3% of the outstanding Addax Petroleum common shares (calculated on a 
fully-diluted basis). In addition, the Offer will be subject to certain 
customary conditions, relevant regulatory approvals including the receipt of 
approval from the Government of The People's Republic of China and the absence 
of any material adverse change with respect to Addax Petroleum.  SIPC may waive 
certain conditions of the Offer in certain circumstances.  If the Offer is 
successful, SIPC has agreed to take steps available to it under relevant 
securities laws to acquire any remaining outstanding Addax Petroleum common 
shares. 
RBC Capital Markets is acting as financial advisor and Fasken Martineau DuMoulin 
LLP is acting as legal counsel to Addax Petroleum and Osler, Hoskin & 
Harcourt LLP is acting as legal counsel to the Board of Directors of Addax 
Petroleum. 
 
 
About Addax Petroleum 
 
Addax Petroleum is an international oil and gas exploration and production 
company with a strategic focus on West Africa and the Middle East. Addax 
Petroleum is one of the largest independent oil producers in West Africa and has 
increased its crude oil production from an average of 8.8 Mbbl/d for 1998 to an 
average of 134.7 Mbbl/d for the first quarter of 2009. Further information about 
Addax Petroleum is available at www.addaxpetroleum.com or at www.sedar.com. 
 
 
Reader Advisory Regarding Forward-Looking Information 
Certain statements contained in this news release, including statements related 
to drilling plans, resources estimates, business strategy and goals, development 
plans and schedules, results of exploration activities and dates that areas may 
come on-stream, government and partner approvals and statements that contain 
words such as "may", "will", "would", "could", "should", "anticipate", 
"believe", "intend", "expect", "plan", "estimate", "budget", "outlook", 
"propose", "project", and statements relating to matters that are not historical 
fact constitute forward-looking information within the meaning of applicable 
Canadian securities legislation. 
Forward-looking information is subject to known and unknown risks and 
uncertainties attendant with oil and gas operations, assumptions and other 
factors which may cause actual results, levels of activity and achievements to 
differ materially from those expressed or implied by such statements which 
include, but are not limited to: risks associated with the ability to obtain 
approvals, waivers, consents, court orders and other requirements necessary or 
desirable to permit or to facilitate the proposed transaction, including 
regulatory and shareholder approvals; risks that the applicable conditions of 
the proposed transaction may not be satisfied; imprecision of reserves and 
resources estimates; ultimate recovery of reserves; volatility of and 
assumptions in respect of commodity prices and general economic, market and 
business conditions; assumptions in or relevant to Addax Petroleum's current 
corporate guidance; industry capacity; competitive action by other companies; 
refining and market margins; the ability to produce and transport crude oil and 
natural gas to markets; the ability to access external sources of debt and 
equity capital; weather and climate conditions; results of exploration and 
development drilling and other related activities; fluctuation in interest rates 
and foreign currency exchange rates; ability of suppliers to meet commitments; 
actions by governmental authorities, including increases in taxes; decisions or 
approvals of administrative tribunals; changes in environmental and other 
regulations; international political events; and expected rates of return. More 
specifically, production may be affected by exploration success, start-up timing 
and success, facility reliability, reservoir performance and natural decline 
rates, water handling and drilling progress. Capital expenditures may be 
affected by cost pressures associated with new capital projects, including 
labour and material supply, project management, drilling rig rates and 
availability and seismic costs. 
The Corporation's actual results could differ materially from those anticipated 
in these forward-looking statements if the assumptions underlying them prove 
incorrect, or if one or more of the uncertainties or risks described above 
materializes. Risk factors are discussed in greater detail in filings made by 
Addax Petroleum with the Canadian provincial securities commissions. 
Readers are strongly cautioned that the above list of factors affecting 
forward-looking information is not exhaustive. Further, forward-looking 
statements are made as at the date they are given and, except as required by 
applicable law, Addax Petroleum does not intend, and does not assume any 
obligation, to update any forward-looking statements, whether as a result of new 
information or otherwise. The forward-looking statements contained in this news 
release are expressly qualified by this advisory. 
For additional information, please contact: 
+-------------------------------------------+---------------------------------------+ 
| Mr. Craig Kelly                           | Mr. Nick Cowling                      | 
| Investor Relations                        | Press Relations                       | 
| Tel.: +41 (0) 22 702 95 68                | Tel.: +1 (416) 934 80 11              | 
| craig.kelly@addaxpetroleum.com            | nick.cowling@cossette.com             | 
| Mr. Chad O'Hare                           | Mr. Mark Antelme                      | 
| Investor Relations                        | Press Relations                       | 
| Tel.: +41 (0) 22 702 94 10                | Tel.: +44 (0) 20 7337 1500            | 
| chad.o'hare@addaxpetroleum.com            | mark.antelme@pelhampr.com             | 
| Ms. Marie-Gabrielle Cajoly                |                                       | 
| Press Relations                           |                                       | 
| Tel.: +41 (0) 22 702 94 44                |                                       | 
| marie-gabrielle.cajoly@addaxpetroleum.com |                                       | 
+-------------------------------------------+---------------------------------------+ 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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