UTS Energy announced that its Board of Directors unanimously recommends that shareholders reject the revised unsolicited offer by Total E&P Canada Ltd. (Total) to acquire UTS for $1.75 per common share. The Board believes that this revised offer remains inadequate.
Total has made no attempt to contact UTS since first launching its unsolicited bid in January. Each of the directors and officers of UTS has indicated their intention not to accept the revised Total offer.
“We have received strong support from our shareholders since Total launched its hostile bid in January. Several of our largest shareholders have publicly stated their ongoing opposition to, and dissatisfaction with, Total’s bid. The revised bid in no way reflects improving industry
fundamentals, remains lower than the sum of UTS’ cash and remaining earn-in and attributes no value to our excellent and expanding suite of oil sands assets,” said Dennis Sharp, Chairman of the Board of Directors. “UTS has some of the highest quality contingent oil sands resources in Alberta. We believe that gives us a value today that exceeds Total’s bid and that our value will increase.”
“We see the proposed merger of Suncor and Petro-Canada as enhancing the intrinsic value of the Fort Hills Project, which in turn directly benefits UTS shareholders. Integration of the Fort Hills Project with the existing Suncor expertise, assets and infrastructure would result in
significant capital and operating cost reductions. This process will of course take time and we are at the very early stages of considering how this will all play out, but one thing is clear right now: this is good news for the UTS shareholder,” said William Roach, President and Chief Executive Officer of UTS.
“UTS and its financial advisers are involved in discussions with other parties with respect to alternative transactions, including restructuring,” said John Watson, Chairman of the independent Special Committee of the Board of Directors. “We intend to continue those
discussions in the best interests of our shareholders, despite this revised bid from Total.” While discussions are ongoing and continue to advance, there can be no assurance they will ultimately lead to a transaction.
In reaching its conclusions, the Board carefully reviewed and considered the revised offer, with the benefit of advice from its financial and legal advisors and the report and recommendation of an independent Special Committee of UTS directors. The Board’s assessment of the revised offer and the reasons for the recommendation that shareholders reject it will be set out in a director’s circular to be issued shortly.