CALGARY, July 8, 2019 /CNW/ – Encana Corporation (NYSE,TSX: ECA) today is commencing its previously announced substantial issuer bid (“the Offer”) to purchase for cancellation up to US$213 million of its common shares (“Shares”). The Offer will expire at 5:00 p.m. (Eastern time) on August 14, 2019, unless extended or withdrawn.
The Offer by Encana is being made by way of a “modified Dutch Auction,” allowing shareholders who choose to participate in the Offer to individually select the price, within a price range of not less than US$4.70 and not more than US$5.40 per Share (in increments of US$0.05 per Share), at which they will tender their Shares to the Offer. Upon expiry of the Offer, Encana will determine the lowest purchase price (which will not be more than US$5.40 per Share and not less than US$4.70 per Share) that will allow it to purchase the maximum number of Shares properly tendered to the Offer, and not properly withdrawn, having an aggregate purchase price not exceeding US$213 million.
Shareholders who wish to participate in the Offer will be able to do so through: (i) an auction tender, in which they will specify the number of Shares being tendered at a specific price per Share; or (ii) a purchase price tender, in which they will agree to have a specified number of Shares purchased at the purchase price to be determined pursuant to the auction and have their Shares considered as having been tendered at the minimum price of US$4.70 for the purposes of determining the purchase price. Shareholders who validly deposit Shares without specifying the method in which they are tendering their Shares will be deemed to have made a purchase price tender, understanding that those Shares will be considered to have been tendered at the minimum price of US$4.70 per Share. All Shares tendered at or below the finally determined purchase price will be purchased, subject to proration and “odd lot” priority, at the same purchase price determined pursuant to the terms of the Offer. Shares that are not purchased, including Shares tendered pursuant to auction tenders at prices above the purchase price, will be returned to shareholders.
The Offer is not conditional on receipt of financing or on any minimum number of Shares being tendered to the Offer, but is subject to other conditions, which are described in the offer to purchase. Encana intends to fund any purchases of Shares pursuant to the Offer from cash on hand, drawing on existing credit facilities or through the issuance of commercial paper.
On July 8, 2019, a tender offer statement on Schedule TO, including an offer to purchase, a letter of transmittal for registered shareholders and related documents, will be filed by Encana with the United States Securities and Exchange Commission (the “SEC”), and a separate issuer bid circular, letter of transmittal for registered shareholders and related documents will be filed by Encana with Canadian securities regulatory authorities.
Encana has engaged BMO Nesbitt Burns Inc. and BMO Capital Markets Corp. to act as financial advisors and dealer managers for the Offer and AST Trust Company (Canada) to act as depositary. Any questions or requests for information regarding the Offer may also be directed to the dealer managers or the depositary.