First Calgary and Eni amend terms of convertibles purchase

By Susanna Moon

Chicago, Sept. 19 - First Calgary Petroleums Ltd. said it agreed to redeem its convertible bonds using funding provided by its planned acquirer, Eni SpA.

Under the original terms of the agreement, the companies planned for Eni to purchase the bonds.

Now, First Calgary will redeem the convertibles at a price of 108% of par plus accrued interest up to buy excluding the date of redemption. The call will take place on the later of the effective date of the plan of arrangement to implement the acquisition and five business days after notice of redemption.

The companies entered into an agreement on Sept. 7 for Eni to acquire all of First Calgary's convertibles for 108% of par plus accrued interest.

First Calgary said on Sept. 8 that its board of directors unanimously approved the proposal and recommended that shareholders and bondholders also approve the deal.

As previously announced, the completion of the deal requires approval by 75% of bondholders and approval by 66 2/3% of shareholders. The deal is expected to be completed at the end of the fourth quarter.

Under the definitive agreement, shareholders will receive C$3.60 per share in cash.

The proposed price represents a 52.5% premium to the company's (Toronto: FCP) closing price of C$2.36 on Sept. 2, the trading day before the company's announcement, and a 59.2% premium to the 30-day weighted average trading price of C$2.26 per share before Sept. 2.

Directors, officers and certain shareholders of First Calgary, including Waterford Finance & Investment Ltd. with 18.3% of outstanding shares, have agreed to support and vote in favor of the deal, according to a press release.

The definitive agreement prohibits First Calgary from soliciting or initiating any discussions concerning any other business combination, but allows its board of directors to accept and recommend a superior proposal if it is required to do so to avoid breaching its fiduciary duties and upon payment of a break-up fee of C$28.2 million.

First Calgary is a Calgary, Alta.-based oil and gas drilling company.

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