OilVoice - Verenex Enters Into Acquisition Agreement with CNPCI

Verenex Enters Into Acquisition Agreement with CNPCI

Sunday, March 01, 2009

Verenex Energy Inc. entered into a definitive agreement on February 24, 2009 whereby a wholly-owned subsidiary of CNPC International Ltd. ("CNPCI") has agreed, subject to the terms of the Agreement, to make an offer to acquire all the outstanding common shares of Verenex by way of a take-over bid (the "Offer") for C$10.00 per share in cash. The aggregate value of this transaction will be approximately C$499 million.

The Agreement reached is the result of the strategic review previously announced by Verenex. The Agreement has been recommended by the Independent Committee of the Board of Directors of Verenex and has been approved by the Boards of Directors of both Verenex and CNPCI. In addition to support from the Verenex Board of Directors, the Agreement contains customary provisions prohibiting Verenex from soliciting any other acquisition proposal but allows the Verenex Board of Directors to accept and recommend a superior proposal upon payment of a break fee of C$15 million (subject to a right to match provision in favour of CNPCI).

The Verenex Board of Directors, after consulting with its financial and legal advisors, has unanimously determined that the Offer is fair to the Verenex shareholders and is in the best interests of Verenex and the Verenex shareholders and has recommended acceptance of the Offer by the Verenex shareholders. FirstEnergy Capital Corp., a financial advisor to Verenex, has provided the Independent Committee with its verbal opinion that, subject to review of final documentation, the consideration to be received by the shareholders of Verenex pursuant to the proposed Agreement is fair, from a financial point of view, to the Verenex shareholders. All of the members of the Verenex Board, its executive officers and its major shareholder, Vermilion Resources Ltd. (representing in aggregate approximately 45% of the outstanding common shares on a fully diluted basis), have entered into lock-up agreements pursuant to which they have agreed to tender their common shares to the Offer in accordance with the terms of the Agreement.

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