ALFA and Harbour Energy to acquire Pacific Rubiales for C$6.50 per common share in all-cash transactionMONTERREY, N.L., MEXICO, May 20, 2015 - ALFA, S.A.B. de C.V. ("ALFA") and Harbour Energy Ltd. and Harbour Energy, L.P. (together, "Harbour Energy") announced today that they have entered into a definitive agreement (the "Arrangement Agreement") with Pacific Rubiales Energy Corp. ("Pacific Rubiales") (TSX:PRE.TO - News) (BVC:PREC) pursuant to which a newly-formed company (the "Purchaser") jointly owned by ALFA and Harbour Energy will acquire all of the issued and outstanding common shares ("Common Shares") of Pacific Rubiales not already owned by ALFA or its affiliates (or held by Pacific Rubiales in treasury) by way of a Plan of Arrangement under the Business Corporations Act (British Columbia) (the "Arrangement") for cash consideration of C$6.50 per share. ALFA currently owns, directly and indirectly, 59,897,800 Common Shares, representing approximately 18.95% of the outstanding Common Shares.
The purchase price represents a 39% premium to the closing price of the Common Shares on the Toronto Stock Exchange (the "TSX") on May 4, 2015, the day prior to the announcement by Pacific Rubiales that it had entered into exclusive discussions with ALFA and Harbour Energy in respect of a possible transaction and a 81% premium to the 30-day volume weighted average price of the Common Shares on the TSX as at such date.
"The transaction represents a step forward in the execution of our strategy to become a significant participant in the oil and gas industry," said Armando Garza Sada, ALFA's Chairman of the Board. "We maintain our positive view regarding Pacific Rubiales' excellent track record and on the strength of their people. Thus, by incorporating ALFA and Harbour Energy as new equity holders, we foresee Pacific Rubiales successfully developing investment projects in Colombia, as well as playing a relevant role in the opening of the energy industry in Mexico," he added.
The transaction has received the unanimous approval of Pacific Rubiales' Board of Directors acting on the advice of a committee of independent directors (the "Independent Committee") and taking into consideration the opinions of their financial advisors. BofA Merrill Lynch is acting as financial advisor to the Board of Pacific Rubiales. UBS Securities Canada Inc. and GMP Securities L.P. ("GMP") are acting as financial advisors to the Independent Committee.
The Independent Committee also obtained an independent formal valuation of the Common Shares from GMP, as required under Canadian securities laws. A copy of the valuation will be included in the proxy circular to be prepared by Pacific Rubiales in connection with a special meeting of its shareholders (the "Meeting") expected to be held in early July 2015, at which shareholders will be asked to vote on the Arrangement. The transaction is expected to close in the third quarter of 2015, subject to the satisfaction of certain conditions. Upon completion of the Arrangement, it is expected that ALFA and Harbour Energy will each hold a 50% interest in Pacific Rubiales.
The Board of Pacific Rubiales has unanimously recommended that shareholders of Pacific Rubiales vote in favor of the Arrangement at the Meeting. In addition, all of the directors and officers of Pacific Rubiales have advised of their intention to vote all Common Shares beneficially owned by them in favor of the Arrangement. To be effective, the Arrangement must be approved by a resolution passed at the Meeting by not less than two-thirds (66 2/3%) of the votes validly cast by all shareholders of Pacific Rubiales present in person or by proxy at the Meeting and also by a simple majority of the votes validly cast by shareholders of Pacific Rubiales present in person or by proxy at the Meeting other than votes cast by ALFA, its affiliates and any other person required to be excluded in determining such approval under applicable Canadian securities laws.
Additional details regarding the transaction will be contained in an early warning report filed by ALFA pursuant to Canadian securities laws on the System for Electronic Document Analysis and Retrieval (SEDAR) under Pacific Rubiales' profile at www.sedar.com. A copy of the report can also be obtained from ALFA at the contact information noted below.
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About ALFA
ALFA is the largest independent producer of complex aluminum components for the automotive industry in the world, and one of the world's largest producers of polyester (PTA, PET and fibers). In addition, it leads the Mexican market in petrochemicals such as polypropylene, expandable polystyrene and caprolactam. ALFA is an important producer, marketer and distributor of highly recognized branded foods in Mexico, the United States and Europe, as well as a leading provider of information technology and telecommunications services for the enterprise segment in Mexico. ALFA also operates in the hydrocarbons industry in Mexico and the United States. In 2014, ALFA reported revenues of Ps. 229,226 million (U.S. $17.2 billion), and EBITDA of Ps. 27,116 million (U.S. $2 billion). Currently, ALFA has manufacturing facilities in 25 countries and employs more than 70,400 people. ALFA's shares are quoted on the Mexican Stock Exchange and on Latibex, the market for Latin American shares of the Madrid Stock Exchange.
About Harbour Energy
Harbour Energy is an energy investment vehicle formed by EIG Global Energy Partners ("EIG") and the Noble Group ("Noble") to pursue control and near control investments in high-quality upstream and midstream energy assets globally. Harbour Energy is externally managed by EIG. EIG specializes in private investments in energy and energy-related infrastructure on a global basis and had $14.8 billion under management as of March 31, 2015. During its 33-year history, EIG has invested over $21.4 billion in the sector through more than 300 projects or companies in 35 countries on six continents. Noble manages a portfolio of global supply chains covering a range of energy and other commodity products from over 140 locations and employing more than 70 nationalities. Noble was ranked number 76 in the 2014 Fortune Global 500.
About Pacific Rubiales
Pacific Rubiales is a Canadian public company and a leading explorer and producer of natural gas and crude oil, with operations focused in Latin America. The Company has a diversified portfolio of assets with interests in approximately 90 exploration and production blocks in seven countries including Colombia, Peru, Guatemala, Brazil, Guyana, Papua New Guinea and Belize. The Company's strategy is focused on sustainable growth in production & reserves and cash generation. Pacific Rubiales is committed to conducting business safely, in a socially and environmentally responsible manner.
Important Legal Notice
The completion of the proposed Arrangement is subject to a number of terms and conditions, including, without limitation: (i) applicable governmental authorities approvals, (ii) required shareholder approval, (iii) necessary court approvals, (iv) the receipt of certain third party consents, including from the lenders under Pacific Rubiales' credit facilities and the holders of Pacific Rubiales' senior notes, and (v) certain termination rights available to the parties under the Arrangement Agreement. These approvals and consents may not be obtained, the other conditions to the Arrangement may not be satisfied in accordance with their terms, and/or the parties to the Arrangement Agreement may exercise their termination rights, in which case the proposed Arrangement could be modified, restructured or terminated, as applicable.
This announcement is being made for information purposes only and is not intended to be, and must not be taken as, the basis for an investment decision or any investment activity. This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase, subscribe for or exchange, any securities of Pacific Rubiales, ALFA or Harbour Energy nor does it constitute a proxy solicitation.
Forward-looking statements in this news release are made pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. When used herein, words such as "plan", "target", "will", "expect", "anticipate", "estimate", "may", "should", "intend", "believe", and similar expressions, are intended to identify forward-looking statements. Forward-looking statements are based on estimates and assumptions made by the parties in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that the parties believe are appropriate in the circumstances. Many factors could cause such estimates and assumptions to vary or differ materially from those expressed or implied by the forward-looking statements. Readers should not place undue reliance on any of these forward-looking statements.
SOURCE ALFA, S.A.B. de CV