CALGARY, ALBERTA–(Marketwired – May 19, 2017) – Savanna Energy Services Corp. (“Savanna“) (TSX:SVY) and Total Energy Services Inc. (“Total Energy“) (TSX:TOT) announced today that they have entered into an amalgamation agreement (the “Amalgamation Agreement“) with 2043324 Alberta Ltd. (“2043324“), a wholly-owned subsidiary of Total Energy, under which Savanna will amalgamate with 2043324, with the amalgamated entity (“Amalco“) becoming an wholly-owned subsidiary of Total Energy (the “Amalgamation“).
The Amalgamation, which is subject to the approval of the holders (the “Savanna Shareholders“) of common shares of Savanna (the “Savanna Shares“), will constitute the subsequent acquisition transaction proposed by Total Energy in order to acquire all of the Savanna Shares that Total Energy did not acquire under its offer to purchase all of the outstanding Savanna Shares (the “Offer“), which expired on April 27, 2017 or pursuant to purchases of Savanna Shares by Total Energy in market transactions. Total Energy acquired an aggregate of 99,772,765 Savanna Shares under the Offer, representing approximately 84.4% of the total number of outstanding Savanna Shares. In addition, Total Energy acquired an aggregate of 1,800,000 Savanna Shares in market transactions while the Offer was outstanding (the “Market Purchase Savanna Shares“). As a result, Total Energy owns approximately 86% of the total number of issued and outstanding Savanna Shares.
A special meeting (the “Meeting“) of the Savanna Shareholders has been called for 8:00 a.m. (Calgary time) on June 20, 2017 at 2400, 525-8th Avenue S.W., Calgary, Alberta to consider, and if thought advisable, pass a special resolution in relation to the Amalgamation (the “Amalgamation Resolution“). The Amalgamation Resolution must be passed by 66 2/3% of the votes cast by Savanna Shareholders, voting in person or by proxy at the Meeting. Total Energy intends to vote all the Savanna Shares held by it in favour of the Amalgamation Resolution. Under applicable securities laws, all votes cast by Total Energy, other than votes attributable to the Market Purchase Savanna Shares held by it, are entitled to be included as votes in respect of the Amalgamation Resolution at the Meeting.
An information circular and proxy statement (the “Information Circular“) and related documents are expected to be mailed to Savanna Shareholders on or about May 24, 2017 to Savanna Shareholders of record on May 19, 2017 and will be filed on SEDAR (under Savanna’s profile) at www.sedar.com.
Subject to the terms of the Amalgamation Agreement, each Savanna Shareholder (other than Total Energy or any Savanna Shareholder who validly exercises dissent rights in relation to the Amalgamation) will, upon completion of the Amalgamation, receive 0.1300 of a common share of Total Energy (each whole share being a “Total Energy Share“) and one redeemable preferred share of Total (each, a “Redeemable Preferred Share“) for each Savanna Share. Redeemable Preferred Shares issued by Total Energy will be automatically redeemed immediately following the completion of the Amalgamation for $0.20 in cash per Redeemable Preferred Share (collectively, with 0.1300 of a Total Energy Share, the “Amalgamation Consideration“). The Amalgamation Consideration is the same as the consideration that was available to Savanna Shareholders under the Offer.
On May 12, 2017, the board of directors of Savanna (the “Savanna Board“) appointed a special committee (the “Savanna Special Committee“) comprised of two (2) independent (within the meaning of applicable securities laws) and experienced directors to assist the Savanna Board in its review of the proposed Amalgamation. The Savanna Special Committee determined to recommend to the Savanna Board the approval of the Amalgamation and the execution and delivery of the Amalgamation Agreement and recommend that Savanna Shareholders vote in favour of the Amalgamation Resolution. The Savanna Board determined to accept those recommendations and subsequently resolved to approve the Amalgamation and the execution and delivery of the Amalgamation Agreement and to recommend that Savanna Shareholders vote in favour of the Amalgamation Resolution.
As Total Energy intends to vote the Savanna Shares held by it in favour of the Amalgamation Resolution, and, under applicable securities laws, all such votes, other than votes attributed to the Market Purchase Savanna Shares are entitled to be counted in respect of the Amalgamation Resolution at the Meeting, it is anticipated that the Amalgamation will be approved and take effect on or about June 20, 2017 (the “Effective Date“). At that time, Amalco will become a wholly-owned subsidiary of Total Energy, the Savanna Shares will thereafter cease to trade on the Toronto Stock Exchange and Savanna will apply to cease to be a reporting issuer under applicable securities laws as soon as reasonably practicable following the Effective Date.
Savanna Shareholders in the United States who either reside in the State of New York or who reside in the State of Utah and are not “exempt institutional investors” under the laws of the State of Utah (together, “Non-Exempt Shareholders“) will not be entitled to receive Total Energy Shares or Redeemable Preferred Shares under the Amalgamation. Arrangements have been made for the Depositary in respect of the Amalgamation, Computershare Investor Services Inc., as agent for such Non-Exempt Shareholders, to sell, or cause to be sold (through a broker in Canada and on the Toronto Stock Exchange) or, in the case of Total Energy Shares and Redeemable Preferred Shares, redeem for cash, those Total Energy Shares or Redeemable Preferred Shares that a Non-Exempt Shareholder would otherwise be entitled to. After completion of such sales, the Depositary will distribute the aggregate net proceeds of sale, after expenses, commissions and applicable withholding taxes, pro rata, among the Non-Exempt Shareholders. Any sales of Total Energy Shares on behalf of Non-Exempt Shareholders will be completed as soon as practicable after completion of the Amalgamation and will be done in a manner intended to maximize consideration to be received from the sale of Total Energy Shares and to minimize any adverse impact of the sale on the market for the Total Energy Shares. The treatment of Non-Exempt Shareholders under the Amalgamation is the same as the treatment of such shareholders under the Offer.
The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein.
This news release does not constitute an offer to sell or a solicitation of an offer to buy, nor will there be any sale of the applicable securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.
Total Energy intends to file with the U.S. Securities and Exchange Commission (“SEC“) a Registration Statement (the “Registration Statement“), which will include the Information Circular (when it becomes available). TOTAL ENERGY URGES INVESTORS AND SECURITYHOLDERS TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC AND CANADIAN SECURITIES REGULATORY AUTHORITIES, FREE OF CHARGE, BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors may obtain a copy of the Information Circular (when it becomes available) and other documents filed in connection with the Amalgamation with the Canadian securities regulators at www.sedar.com (under the issuer profile for Savanna) and with the SEC at the SEC’s website at www.sec.gov. The Information Circular (when it becomes available) and other documents may also be obtained, free of charge, upon request made to Total Energy at 2550, 300 – 5th Avenue S.W., Calgary, Alberta T2P 3C4.
Savanna is a leading contract drilling and oilfield services company operating in North America and Australia providing a broad range of drilling, well servicing and related services with a focus on fit for purpose technologies and industry-leading Aboriginal relationships.
About Total Energy
Total Energy is a growth oriented energy services corporation involved in contract drilling services (Chinook Drilling), rentals and transportation services (Total Oilfield Rentals) and the fabrication, sale, rental and servicing of natural gas compression (Bidell Gas Compression) and process equipment (Spectrum Process Systems).