First Calgary Petroleums to buy back its 9% convertibles on Nov. 28

By Susanna Moon

Chicago, Nov. 21 - First Calgary Petroleums Ltd. said it will redeem all of its outstanding 9% convertible bonds on Nov. 28 after the completion of its acquisition by Eni SpA.

Bondholders will receive $1,080 in cash for each $1,000 principal amount of bonds plus accrued interest to the redemption date.

On Sept. 19 First Calgary said it agreed to redeem its convertible bonds using funding provided by Eni, the aquirer.

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

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.

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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