Groundstar Resources Limited

Groundstar Resources Limited

August 13, 2007 17:00 ET

Groundstar Adopts Shareholder Rights Plan

CALGARY, ALBERTA--(Marketwire - Aug. 13, 2007) - Groundstar Resources Limited (TSX VENTURE:GSA) ("Groundstar" or the "Company") announced today that its Board of Directors has adopted a Shareholder Rights Plan (the "Rights Plan") designed to encourage the fair treatment of shareholders in connection with any take-over offer for the Company. The Rights Plan addresses the Company's concerns that existing Canadian legislation does not allow sufficient time, if a take-over bid is made, for either the Board of Directors or the shareholders to properly consider the bid, or for the Board of Directors to seek alternatives to such a bid.

The Rights Plan is effective immediately and will provide the Board of Directors and the shareholders more time to fully consider any unsolicited take-over bid for the Company. It will also allow more time for the Board of Directors to pursue, if appropriate, other alternatives to maximize shareholder value. Shareholders will be asked to confirm the Rights Plan at the Company's annual and special meeting of shareholders expected to be held on October 16, 2007, and upon receipt of such confirmation, the Rights Plan will have an initial term which expires at the annual meeting of shareholders of the Company to be held in 2010 unless terminated earlier. The Rights Plan may be extended for an additional three years after 2010 by resolution of shareholders at such meeting.

The rights issued under the Rights Plan become exercisable only when a person, including any party related to it, acquires or announces its intention to acquire 20% or more of the Company's outstanding common shares without complying with the "Permitted Bid" provisions of the Rights Plan or without approval of the Board of Directors. Should such an acquisition occur, each right would, upon exercise, entitle a rightsholder, other than the acquiring person and related persons, to purchase common shares of the Company at half the prevailing market price at the time.

Under the Rights Plan, a Permitted Bid is a bid made for all of the Company's common shares to all shareholders that is open for not less than 60 days. If, at the end of the 60 days, at least 50% of the outstanding shares, other than those owned by the offeror and certain related parties, have been tendered to the bid, the offeror may take up and pay for the shares but must extend the bid for a further 10 days to allow other shareholders to tender.

The Board of Directors is not aware of any pending or threatened take-over bids for the Company that have been made or are contemplated.

Additional details regarding the Rights Plan will be provided in the Management Information Circular that will be available for viewing on SEDAR and mailed to the shareholders of the Company prior to the Company's upcoming annual and special meeting of shareholders.


Groundstar is a publicly traded Canadian junior oil and gas company actively pursuing exploration opportunities in Guyana, Central Asia and North Africa and the Middle East.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the accuracy or adequacy of this release.

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