Wilks will agree to provide tendering Shareholders up to $0.25 in cash per Share and a minimum cash consideration of $0.18 per Share.
Wilks Brothers has improved the terms of its Premium Offer to acquire all of the issued and outstanding common shares (“Shares”) of Calfrac Well Services. In accordance with the terms of the amendment, Wilks will agree to provide tendering Shareholders up to $0.25 in cash per Share and a minimum cash consideration of $0.18 per Share.
The exact amount of additional value above the current $0.18 cash per Share that will be provided to tendering Shareholders is subject to the number of Shares deposited pursuant to the Premium Offer and the aggregate purchase price for all Shares acquired pursuant to the Premium Offer not exceeding $21,103,250. If all Shareholders other than MATCO, the officers and directors of Calfrac and Wilks deposit their Shares to the Premium Offer, Shareholders would receive $0.25 in cash per Share.
The amendment to Wilks’ Premium Offer follows the disclosure by the officers and directors of Calfrac (including Mr. Mathison) in Calfrac’s Director’s Circular dated September 24, 2020 that they do not intend to deposit their Shares to the Premium Offer. In fact, some or all of these insiders may be contractually prohibited from doing so. As a result, Wilks has determined that the value that would otherwise be paid to them should be unlocked and directed to the other Shareholders of Calfrac, to a maximum of $0.25 in cash per Share.
The aggregate cash consideration of $21,103,250 that Wilks is prepared to provide to Calfrac Shareholders is more than 110% higher than the $10 million aggregate cash consideration that Calfrac has announced they are prepared to make available to Shareholders through the cash alternative under the Amended Management Transaction.
Wilks’ announcement today results in the following clear choice for Shareholders: Receive up to $0.25 cash (and no less than $0.18 cash) per Share under the Wilks’ Premium Offer vs. no more than a likely outcome of $0.12 cash under the Amended Management Transaction. Wilks’ Premium Offer provides a premium of no less than 50% and up to 108% over the cash consideration under the Amended Management Transaction.
As before, the Wilks’ Premium Offer continues to represent overwhelmingly superior value for Shareholders when compared with the Amended Management Transaction.
Wilks also announced that it is adding a condition to the Premium Offer to preserve the status quo with respect to Calfrac’s issued shares in order to ensure that current Shareholders actually receive the consideration under the Wilks’ Premium Offer. As support for Calfrac’s Amended Management Transaction continues to disappear in the face of the overwhelmingly superior value provided by Wilks’ Premium Offer, Calfrac is resorting to increasingly desperate measures, including threatening to take back the value it has offered to current Shareholders. Wilks will not permit that. Calfrac Shareholders right to choose a premium recovery will not be subjected to threats. The new condition will protect value for the current shareholders of Calfrac.
Wilks anticipates that the Notice of Amendment and related documents will be mailed to Shareholders and posted on SEDAR within the next ten days.
Source: Company Press Release