Suroco Energy Inc.

Suroco Energy Inc.

June 20, 2014 16:16 ET

ISS Proxy Advisory Services Updates Its Report to Recommend Suroco Shareholders Vote IN FAVOUR of Revised Arrangement Transaction With Petroamerica Oil Corp. Over Revised Vetra Offer

CALGARY, ALBERTA--(Marketwired - June 20, 2014) -


Suroco Energy Inc. (TSX VENTURE:SRN) ("Suroco" or the "Corporation") is pleased to announce that ISS Proxy Advisory Services ("ISS") has published a report recommending their clients vote IN FAVOUR of the previously announced arrangement transaction (the "Petroamerica Arrangement") with Petroamerica Oil Corp. ("Petroamerica"), as recently revised for consideration of an increased value equal to $0.80 per common share of Suroco ("Suroco Shares"). ISS indicated in its report that it was changing its voting recommendation from its June 19, 2014 report whereby it recommended that Suroco shareholders vote for the hostile bid by Vetra Holding S.a.r.l. (through its wholly-owned subsidiary Vetra Acquisition Ltd.)("Vetra"), as revised to increase the consideration to $0.72 per Suroco share (the "Vetra Offer").

According to ISS "[f]urther to developments announced June 19th, Suroco has today (June 20th) announced a revised offer by Petroamerica ("Revised Petroamerica Offer") to acquire all of the issued and outstanding common shares of Suroco for $0.80 per Suroco share. The Revised Petroamerica Offer also entitles holders of Suroco shares to elect to receive common shares in Petroamerica (PTA), a combination of cash and PTA shares, or all cash as further explained in the analysis section below."

In its June 20, 2014 report, ISS concluded that the Vetra Offer is currently below the implied offer consideration by Petroamerica and that Vetra has not made a compelling case to continue supporting the Vetra Offer. Therefore, after consideration of the Vetra Offer and the Revised Petroamerica Offer, ISS has advised of a change in its voting recommendation such that it is once again IN FAVOUR of the Petroamerica Arrangement.

Consideration under the Petroamerica Arrangement is payable through an election by the Suroco shareholders to receive one of the following for each Suroco Share held: (i) 2.2161 Petroamerica Shares (the "Share Option"); (ii) $0.2079 in cash and 1.6401 Petroamerica Shares (the "Cash and Share Option"); or (iii) $0.80 in cash (the "All Cash Option"). The total amount of cash available is capped at $27 million. In the event that the amount of cash elected to be received by the holders of Suroco Shares exceeds $27 million (taking into consideration the Cash and Share Option elections and the All Cash Option elections), the shareholders of Suroco that selected the All Cash Option will receive a pro-rated amount of cash and the equivalent pro-rated number of Petroamerica Shares based on an exchange ratio of 2.2161 Petroamerica Shares for each Suroco Share. There is no limit on the ability of Suroco Shareholders to make any of the aforementioned elections.

ISS is a leading independent corporate governance analysis and proxy advisory firm whose recommendations assist its clients in making choices regarding proxy voting and transaction decisions.

The Corporation is a Calgary-based junior oil and gas company, which explores for, develops, produces and sells crude oil, natural gas liquids and natural gas in Colombia. The Corporation's common shares trade on the TSX Venture Exchange under the symbol SRN.

For more information about the Petroamerica Arrangement, see the Corporation's joint press release with Petroamerica dated June 19, 2014.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the Petroamerica Arrangement or Vetra Offer and has neither approved nor disapproved the contents of this press release.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Suroco Energy Inc.
    Alastair Hill
    President and Chief Executive Officer
    (403) 232-6784
    (403) 232-6747 (FAX)

    Suroco Energy Inc.
    Travis Doupe
    VP Finance and Chief Financial Officer
    (403) 232-6784
    (403) 232-6747 (FAX)