Vitol Anker International B.V.

Vitol Anker International B.V.

July 20, 2009 08:14 ET

Vitol Anker Announces Intended All Cash Offer to Acquire Shares of Hillsborough Resources Limited at a 43% Premium

TORONTO, ONTARIO--(Marketwire - July 20, 2009) - Vitol Anker International B.V. ("Vitol Anker"), a wholly owned subsidiary of the Vitol Group, today announced its intention to make an offer to acquire all of the common shares of Hillsborough Resources Limited ("Hillsborough") that it does not currently own for a cash price equal to CAD$0.45 per share, representing a premium of approximately 43% per common share based on the July 17, 2009 closing price of the shares on the TSX and a premium of approximately 40% per common share based on the volume weighted average trading price of the common shares on the TSX for the 30 calendar day period ended July 17, 2009.

Vitol Anker has entered into a lock-up agreement in support of Vitol Anker's intended offer with holders of approximately 7.1 million Hillsborough common shares, representing approximately 9.0% of the outstanding Hillsborough common shares.

"Our offer presents compelling value to Hillsborough's shareholders and creates an immediate opportunity for shareholders to receive cash proceeds for their investment. Our offer price reflects our respect and enthusiasm for Hillsborough's business," said Jacobus Sterken, Vitol Anker's Director.

Vitol Anker currently holds an aggregate of 16,555,300 common shares of Hillsborough and a debenture of Hillsborough for the principal amount of CAD$2,061,000 convertible at the holder's option at a price of CAD$0.60 per common share. Assuming conversion of the debenture, Vitol Anker would hold approximately 24% of the outstanding Hillsborough common shares on an otherwise undiluted basis.

On July 14, 2009, Hillsborough announced that it had finalized an agreement to revise the terms of its coal off-take agreement with Vitol S.A., an affiliate of Vitol Anker, that was signed in 2008. Under the terms of the revised agreement, Vitol S.A. has agreed to acquire 700,000 MT of Quinsam thermal coal (+/- 10% at Vitol S.A.'s option) at a base price of CAD$80/MT, subject to coal quality adjustments. In addition to the 68,294 tonnes delivered in March 2009, 140,000 tonnes are scheduled to be delivered in 2009 with the remaining tonnage to be delivered between January 1, 2010 and December 31, 2012. Assuming Quinsam maintains annual coal production at the 2009 budgeted amount of 435,000 tonnes until 2012 (which amount was announced by Hillsborough on June 24, 2009), the revised contract represents approximately 44% of Quinsam coal production during that period.

Earlier this year, Vitol Anker had been in discussions with the Hillsborough Board with a view to consummating a consensual, negotiated transaction supported by the Hillsborough Board. However, Vitol Anker and the Hillsborough Board were unable to agree on mutually acceptable transaction terms. As a result, Vitol Anker has decided to take its offer directly to Hillsborough shareholders to provide shareholders with an opportunity to benefit from an all cash offer at a significant premium to Hillsborough's current market price.

Based on the Vitol Group's security holdings in Hillsborough and applicable law, any Vitol Anker offer to Hillsborough's shareholders will require (unless such requirement is waived or an exemption from such requirement is available) that an independent committee of members of the Board of Directors of Hillsborough supervise the preparation of a formal valuation of the Hillsborough common shares by an independent valuator. Unless there is a waiver of or exemption from the valuation requirement, such valuation will need to be completed and provided by Hillsborough to Vitol Anker in order for it to be in a position to make and mail its offer to Hillsborough's shareholders in accordance with applicable Canadian securities laws. In light of Vitol Anker's earlier discussions with the Hillsborough Board in respect of a possible consensual transaction, Vitol Anker understands that such an independent committee of Hillsborough Directors had been formed and had retained (at Vitol Anker's expense) an independent valuator that had completed or substantially completed an independent valuation.

Vitol Anker anticipates that the intended offer would proceed by way of take-over bid and be subject to customary conditions, including that: there is validly deposited and not withdrawn from the Offer at the expiry time such number of Hillsborough common shares that constitutes, together with common shares owned by Vitol Anker, at least 66 2/3% of the Hillsborough common shares then outstanding (calculated on a fully-diluted basis), and at least a majority of the Hillsborough common shares then outstanding (calculated on a fully-diluted basis), the votes attached to which would be included in the minority approval of a second step business combination under applicable securities laws; obtaining all necessary approvals; no material adverse change in Hillsborough's business, assets or operations; and satisfactory completion of confirmatory due diligence. Vitol Anker's intended offer would not be conditional on financing and is expected to be funded from available cash. The timing of Vitol Anker's making and mailing of the offer to Hillsborough shareholders is dependant, among other things, on the prompt completion of the formal valuation of Hillsborough's common shares, as supervised by an independent committee of Hillsborough's Board.

Vitol Anker has retained Credit Suisse as its exclusive financial advisor and Blake, Cassels & Graydon LLP as legal counsel in connection with the proposed transaction.

The Vitol Group was founded in 1966 and started its business with the trading of oil products. It is now an independent, privately owned group of trading companies, with its core business in energy, particularly crude oil and oil products. Other Vitol Group trading businesses include natural gas, sugar, non-ferrous metals, coal, chemicals and power. Vitol Group is also active in shipping, oil terminals and oil exploration and production.

This release is not a recommendation, an offer to purchase or a solicitation of an offer to sell shares of Hillsborough. Vitol Anker has not commenced and may not make an offer to purchase, or commence a take-over bid for, Hillsborough shares as described in this release. In the event that Vitol Anker makes an offer to purchase, or commences a take-over bid, for Hillsborough shares, Vitol Anker will file with the securities regulatory authorities in Canada a take-over bid circular and related documents.

Forward-Looking Statements

Certain statements in this release, including those relating to Vitol Anker's intention to make an offer and the offer price, are forward-looking statements and are based on current expectations and assumptions that are subject to risks and uncertainties. Any statements that are not statements of historical fact (including statements containing the words "believes," "intends", "plans," "anticipates," "expects," "estimates" or similar expressions) should be considered to be forward-looking statements. Actual results could differ materially because of factors such as the timing of Vitol Anker's receipt of the required formal valuation, the time required to consummate the proposed transaction, the satisfaction of conditions of the offer, the results of any due diligence conducted by Vitol Anker, material adverse changes in the affairs of Hillsborough, any actions or omissions by Hillsborough or its Board of Directors, and any necessary actions to obtain required third party approvals and consents. The forward-looking statements contained in this news release are made as of the date of this release and, accordingly, are subject to change after such date. Except as may be required by Canadian securities laws, Vitol Anker does not undertake any obligation to update or revise any forward-looking statements contained in this news release, whether as a result of new information, future events or otherwise.

Contact Information

  • Cohn and Wolfe
    Victoria Dix
    Geneva, Switzerland
    +41 22 908 4071