Ember Resources Inc.

Ember Resources Inc.

June 24, 2008 14:20 ET

Ember Resources Inc. Provides Cordero With Binding Offer to Acquire All of the Outstanding Shares of Cordero Energy Inc.

CALGARY, ALBERTA--(Marketwire - June 24, 2008) - Ember Resources Inc. (TSX:EBR) ("Ember") has provided Cordero Energy Inc. ("Cordero") with a binding offer (the "Ember Offer") to enter into a definitive arrangement agreement giving effect to its previously announced proposal to acquire all of the outstanding common shares of Cordero for a consideration of $5.50 per Cordero share, payable, at the election of each Cordero shareholder, in cash or 2.683 shares of Ember. An aggregate of $70 million in cash would be payable to the Cordero shareholders and adjustments to the aggregate number of Ember Shares issued would be made in the event that Cordero Shareholders elect to receive more or less than $70 million in cash.

Under the Ember Offer, Ember has agreed to enter into a definitive arrangement agreement subject only to: (i) the expiry of the currently outstanding cash offer of $4.75 per Cordero Share made by ENMAX Acquisition Corp. ("ENMAX") to acquire all of the Cordero Shares (the "Enmax Offer") without ENMAX taking up any Cordero Shares thereunder and without payment of the announced special dividend of Cordero; (ii) termination of the pre-acquisition agreement dated February 18, 2008 between Cordero and ENMAX Corporation with payment or provision for payment of the break fee thereunder, (iii) the execution of lock-up agreements by the officers and directors of Cordero and (iv) the absence of any intervening material change of Cordero or legal action affecting the transaction. The form of arrangement agreement was negotiated between Ember and Cordero following completion of mutual due diligence.

Ember has received commitment letters from shareholders representing an aggregate of 9,837,296 Cordero Shares, or approximately 26.5% of the outstanding Cordero Shares, pursuant to which such holders have agreed, subject to certain terms and conditions or to the receipt of a superior offer, to support Ember's acquisition of the Cordero Shares and not tender their Cordero Shares to the Enmax Offer. Cordero shareholders representing 5,313,737 shares have confirmed they will elect to take all Ember Shares on the exchange, resulting in the balance of the Cordero shareholders being able to elect to receive up to 40% of the total consideration under the transaction in the form of cash.

The Ember Offer is open for acceptance by Cordero until 5:00 p.m. (Calgary time) on June 27, 2008, being thirty minutes following the expiry at 4:30 p.m. (Calgary time) on that date of the Enmax Offer.

Ember views its offer as being superior to the Enmax Offer. The cash component of Ember's offer at $5.50 per share is a 6% premium to the Enmax Offer of $4.75 per share plus the special conditional dividend of $0.45 per share. The share component of Ember's offer is valued at $5.82 per share which is a 12% premium to the Enmax offer based on the three day weighted average trading price of Ember shares of $2.17 per share since the announcement of Ember's revised proposal. In addition, the share component of Ember's offer provides the opportunity for Cordero shareholder's to participate in a continuing upward re-evaluation of the combined entity due to rising natural gas prices. Although the Enmax Offer is supported by the Cordero Board of Directors and management (representing only 3,660,205 shares or 9.6% of the outstanding Cordero shares) and the Cordero Board of Directors has recommended acceptance of the Enmax Offer on six separate occasions, the Enmax Offer has not been accepted by the Cordero shareholders. Accordingly, Ember and its financial advisor, FirstEnergy Capital Corp., believe the Ember Offer is the most attractive alternative for the Cordero shareholders.

Ember Resources Inc. is a resource company specializing in coal bed methane (CBM) with extensive land and resource holdings in Alberta, Canada. Ember's shares are traded on the Toronto Stock Exchange under the trading symbol "EBR".

Further information concerning Ember's analysis of its proposed transaction with Cordero is available on Ember's website at www.emberresources.com.

Reader Advisory

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities of Ember within the United States. The securities of Ember have not been and will not be registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or any state securities laws. Accordingly, the shares may not be offered or sold in the United States or to U.S. persons (as such terms are defined in Regulation S under the 1933 Act) unless registered under the 1933 Act and applicable state securities laws or an exemption from such registration is available.

Forward Looking Statements

This press release contains forward-looking statements. More particularly, this press release contains statements concerning the intention of Ember to seek to acquire all of the Cordero Shares and the manner in which such an acquisition would be structured and funded. These statements are based on certain key expectations and assumptions made by Ember, including expectations and assumptions concerning the response by Cordero, the Cordero Shareholders and third parties to the proposed acquisition, the receipt of necessary shareholder, regulatory and court approvals and the status of the Enmax Offer. Although Ember believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because inherent risks and uncertainties might result in Ember not proceeding with the proposed acquisition. These risks and uncertainties include a failure to obtain necessary shareholder or third party support or agreements, the emergence of a superior competing bid or the successful completion of the Enmax Offer.

The forward-looking statements contained in this press release are made as of the date hereof and Ember undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Contact Information

  • Ember Resources Inc.
    Mr. Douglas A. Dafoe
    Chairman & CEO
    (403) 270-0803
    (403) 270-2850 (FAX)
    Ember Resources Inc.
    Mr. Terry S. Meek
    President & COO
    (403) 270-0803
    (403) 270-2850 (FAX)
    Website: www.emberresources.com