Calgary, Alberta – Briko Energy Corp. (“Briko” or the “Corporation”) is pleased to announce that it has entered into an arrangement agreement (the “Arrangement Agreement”) with Journey Energy Inc. (“Journey”), pursuant to which Journey will acquire all the issued and outstanding common shares of Briko by way of Plan of Arrangement under the Business Corporations Act (Alberta) (the “Acquisition”).
Consideration for Briko shareholders from the Acquisition includes $2.9 million of cash (the “Cash Maximum”) and the issuance of 3.5 million common shares of Journey (“Journey Shares”), on the basis of $0.26 in cash and 0.31 Journey Shares for each common share of Briko (“Briko Shares”) held. Holders of Briko Shares may also elect to receive their consideration all in cash or in Journey Shares, subject to the Cash Maximum being payable by Journey. Assuming the Cash Maximum, based on the 20 day volume weighted average price per Journey Share preceding June 23, 2021 of $1.06 per share, the total consideration for the Acquisition is approximately $6.6 million (or approximately $0.59 per Briko Share based on 11.2 million Briko Shares outstanding).
The Acquisition is expected to close on or about August 18, 2021. Completion of the Acquisition is subject to the approval of at least 66 2/3 percent of Briko Shareholders voting at an annual and special meeting scheduled to be held on August 12, 2021. Completion of the proposed transaction is also subject to, among other things, the receipt of court approval and other customary closing conditions.
The Board of Directors of Briko has unanimously approved the Acquisition. Based in part on a verbal opinion from Briko’s financial advisor Sayer Energy Advisors, the Briko Board of Directors determined that the Acquisition is in the best interests of Briko and is fair from a financial point of view to Briko shareholders. The Briko Board of Directors has resolved to recommend that Briko shareholders vote their common shares in favor of the Acquisition. All the directors and officers of Briko, holding approximately 8.4% of the outstanding common shares of Briko, have entered into support agreements to vote their Briko common shares in favour of the Acquisition.
The Arrangement Agreement provides for non-solicitation covenants on behalf of Briko which are subject to the fiduciary duty obligations of the Board of Directors of Briko and provides Journey with the right to match any superior proposal received by Briko. The Arrangement Agreement also provides for mutual non-completion fees of $375,000 in the event the Transaction is not completed or is terminated by either party in certain circumstances.
About Briko Energy Corp.
Briko Energy Corp. is an Alberta Foothills Cardium focused company with undeveloped land, crude oil and natural gas reserves and a production base with associated infrastructure. Corporate information can be found at: www.brikoenergy.com.