While Calfrac can delay the inevitable, it is clear that Shareholders have recognised that the Management Transaction is the Worst of the three possible outcomes presented to them and they will vote accordingly.
Under the Management Transaction, Shareholders suffer immediate, massive and continuing dilution, and will retain only a small stake in an over-levered and cash-starved company which has no clear path to success and is likely headed towards a further restructuring that will completely eliminate shareholder value. This is true for all Shareholders except the Company's Chairman, Mr.
In contrast to the Shareholders' fate, if the Management Transaction proceeds a self-selected group of unsecured creditors will reap the benefits of the "payment in kind" financing that is part of the Management Transaction. That self-selected group will also benefit from the payment of a
A Better outcome for Shareholders is the Premium Offer made by an affiliate of
The Best outcome for all stakeholders is the Wilks Superior Alternative Proposal, delivered to Calfrac on
The fact is that the
Calfrac's "Review" of the Premium Offer is Pre-Ordained and Merely a Delay Tactic
The Premium Offer is conditioned on Shareholders voting against the Management Transaction. A recommendation by the Board to accept the Premium Offer would be the same as directing Shareholders to vote against the Management Transaction. So, when Calfrac says that it will provide Shareholders its recommendations on the Premium Offer by "…consider[ing] the ability of the proposed
The Special Committee and Board are contractually required to recommend against acceptance of the Premium Offer unless more than 2/3 of the unsecured noteholders give them permission to do otherwise – meaning they cannot evaluate the Premium Offer solely on its merits. The so-called "review" is a complete façade, and is designed only to provide the Board with more time to try and convince shareholders to vote against their own economic interests.
As we have said in the past, the purpose of the Premium Offer is to deliver the value to Shareholders that Calfrac and its immobilized Board cannot, and without regard to the views of the unsecured noteholders. Ideally, Wilks would like to see a restructuring of Calfrac through the Alternative Superior Proposal that delivers superior value to all stakeholders and results in a de-levered and financially sound company that will be positioned to be a strong participant in the coming consolidation of the oilfield services industry. So far, that does not seem possible, so Wilks has elected to protect Calfrac's shareholders directly.
The choice for Shareholders is clear. Vote the BLUE proxy today AGAINST the Management Transaction to preserve your ability to receive a premium recovery.
The proxy deadline for the BLUE proxy will be extended. We will communicate further details once Calfrac confirms their new proxy deadline.
Click here for voting instructions.
If you have already voted AGAINST the Management Transaction using the BLUE proxy, you do not need to do anything further and we thank you for your support.
If you have yet to vote or want to change your vote, you are encouraged to vote using only the BLUE proxy. Please disregard any other proxies you receive. If you have already submitted a proxy solicited by Management, you may still change your vote and protect your economic interests by voting your BLUE proxy today. The later dated proxy will supersede any earlier proxy submitted.
Need help voting? Please contact
QUESTIONS/ VOTING/ TENDERING ASSISTANCE
Shareholders who have questions or require voting or tendering assistance, may contact our communications advisor, proxy solicitation agent, information agent and depositary,
NOTICE
THIS ANNOUNCEMENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE OR FORM PART OF THE OFFER OR AN INVITATION TO PURCHASE, OTHERWISE DISPOSE OF OR A SOLICITATION OF AN OFFER TO SELL, ANY SECURITY. WILKS HAS FILED A TAKE-OVER BID CIRCULAR AND RELATED MATERIALS WITH VARIOUS SECURITIES COMMISSIONS IN
ADDITIONAL DISCLOSURE
Wilks is relying on the exemption under section 9.2(4) of National Instrument 51-102 - Continuous Disclosure Obligations and exemptive relief provided by the
Based upon publicly available information, Calfrac's registered office is at 4500, 855-2nd Street S.W.
Wilks and Dan and
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
Certain information in this Press Release may constitute "forward-looking information", as such term is defined in applicable Canadian securities legislation, about the objectives of Wilks as they relate to Calfrac. All statements other than statements of historical fact may be forward-looking information. Forward-looking information is often, but not always, identified by words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions.
Material factors or assumptions that were applied in providing forward-looking information include, but are not limited to: the intention of Wilks to make a formal take-over bid for the shares of Calfrac and the results of such bid; that required regulatory approvals will be obtained on terms satisfactory to Wilks; the reaction of Calfrac's Board and management to the Bid; the response to and outcome of any applications to Courts or regulators relating to the transactions described herein or otherwise that may be made by or against Calfrac or Wilks; the intention of Wilks to apply to securities regulators for discretionary relief from certain statutory requirements applicable to the bid and the results of such application.
Forward-looking information contained in this Press Release reflects current reasonable assumptions, beliefs, opinions and expectations of Wilks regarding future events and operating performance of Calfrac and speaks only as of the date of this Press Release. Such forward-looking information is based on currently publicly available competitive, financial and economic data and operating plans and is subject to known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Calfrac, or general industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Many other factors could also cause Calfrac's actual results, performance or achievements to vary from those expressed or inferred herein, including, without limitation, the success of the proposed Premium Offer, the reaction of the market and Calfrac's shareholders, creditors and customers to the Premium Offer, the impact of legislative, regulatory, competitive and technological changes; the state of the economy; credit and equity markets; the financial markets in general; price volatility; interest rate and exchange rate fluctuations; general economic conditions and other risks involved in the hydraulic fracking industry. The impact of any one factor on a particular piece of forward-looking information is not determinable with certainty as such factors are interdependent upon other factors, and Wilks' course of action would depend upon its assessment of the future considering all information then available.
Should any factor affect Calfrac in an unexpected manner, or should any assumptions underlying the forward-looking information prove incorrect, the actual results or events may differ materially from the events predicted. All of the forward-looking information reflected in this Press Release is qualified by these cautionary statements. There can be no assurance that the results or developments anticipated by Wilks will be realized or, even if substantially realized, that they will have the expected consequences for Calfrac, Calfrac's shareholders or Wilks. Forward-looking information is provided, and forward-looking statements are made as of the date of this Press Release and except as may be required by applicable law, Wilks disclaims any intention and assumes no obligation to publicly update or revise such forward-looking information or forward-looking statements whether as a result of new information, future events or otherwise. Nothing herein shall be deemed to be an acknowledgement or acceptance by Wilks that the terms of the Management Transaction are legally permissible, appropriate or capable of implementation.
Webpage: www.afaircalfrac.com
Twitter: @aFairCalfrac
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