Mart Resources, Inc.
TSX : MMT

Mart Resources, Inc.

March 02, 2015 08:00 ET

Mart Enters Non-Binding Letter of Intent for Sale of the Company

CALGARY, ALBERTA--(Marketwired - March 2, 2015) - Mart Resources, Inc. (TSX:MMT) ("Mart" or the "Company") announces that it has entered into a letter of intent (the "Letter of Intent") with Midwestern Oil and Gas Company Limited, the operator of and one of Mart's co-venturers in the Umusadege field ("Midwestern"). The Letter of Intent sets out the intention of the Company and Midwestern (collectively, the "Parties"), on a non-binding basis, to use good faith efforts to negotiate and enter into a definitive agreement (the "Definitive Agreement") pursuant to which Midwestern would agree to acquire all of the issued and outstanding shares of Mart for cash consideration of CAD$0.80 per common share (the "Proposed Offer Price") by way of a plan of arrangement (the "Proposed Transaction"). The Proposed Offer Price represents a 40.3% premium to the closing price and a 28% premium to the 20 day VWAP price of Mart's common shares on the Toronto Stock Exchange on February 27, 2015, the last trading day for Mart's common shares prior to the date of this announcement.

As previously announced, following the receipt of an unsolicited, non-binding offer to acquire Mart, the Company's Board of Directors (the "Mart Board") established an independent special committee (the "Special Committee") to review the offer. The Special Committee has reviewed the Letter of Intent from Midwestern and has recommended that the Company enter into the Letter of Intent and proceed with the negotiation of a Definitive Agreement. On February 27, 2015, following receipt of the Special Committee's recommendation and advice from its external financial advisor, Mart's Board approved the Letter of Intent and negotiation of a Definitive Agreement.

Other Terms of the Letter of Intent

Period of Exclusivity and Non Solicitation

The Parties have agreed, on a binding basis, to a period of exclusivity commencing on February 27, 2015 and ending on March 15, 2015 (the "Exclusivity Period"), unless earlier terminated, during which Mart will not solicit a proposal that might be competitive with the Proposed Transaction and during which Mart and Midwestern will use good faith efforts to finalize the terms of the Definitive Agreement. The Letter of Intent contains customary provisions for transactions of this nature for the Mart Board to respond during the Exclusivity Period to any unsolicited acquisition proposal determined to be superior to the Proposed Transaction in the discharge of its fiduciary duties, subject to the ability of Midwestern to match.

Midwestern Financing

Midwestern has advised Mart that its ability to complete the Proposed Transaction is subject to completing a private placement financing (the "Proposed Financing"). Accordingly, the Definitive Agreement, in the event one is entered into, will provide that Midwestern's obligation to complete the Proposed Transaction will be subject to the completion of the Proposed Financing (the "Financing Condition"). Midwestern has agreed to use reasonable commercial efforts to satisfy the Financing Condition on or prior to June 15, 2015 and to keep Mart informed as to the status and timing of the satisfaction of the Financing Condition. Further, the Letter of Intent contemplates that prior to signing of the Definitive Agreement, Midwestern's financial advisor will provide a highly confident letter acceptable to Mart in respect of the Proposed Financing.

The Letter of Intent contemplates that the Definitive Agreement will obligate Midwestern to provide evidence satisfactory to Mart that written binding commitments have been entered into with investors in the Proposed Financing on or before May 15, 2015 (the "Commitment Date"). In the event such evidence is not received to the reasonable satisfaction of Mart on or prior to the Commitment Date, Mart (i) shall be permitted to provide due diligence access to certain eligible persons which are to be agreed by Mart and Midwestern equivalent to that which has been provided to Midwestern; and (ii) may adjourn or postpone any meeting of Mart shareholders previously called to approve the Proposed Transaction. Notwithstanding the foregoing, the Letter of Intent contemplates that Midwestern shall have the right to satisfy the Financing Condition through to June 15, 2015 and complete the Proposed Transaction in accordance with the terms of the Definitive Agreement.

The Letter of Intent contemplates that the Definitive Agreement will provide for customary deal protection terms and the payment of a customary break fee by each party in certain circumstances to be mutually agreed upon, including in the event that Midwestern does not satisfy the Financing Condition by June 15, 2015.

Structure and Timing of Proposed Transaction

Subject to the Parties entering into a Definitive Agreement, the Proposed Transaction is expected to be carried out by way of a plan of arrangement under the provisions of the Business Corporations Act (Alberta) and will be subject to the approval of 66 2/3% of the votes cast by Mart shareholders at a special meeting of shareholders expected to be held in early to mid-June, 2015. It is anticipated that closing of the Proposed Transaction will subject to certain other conditions, including receipt of Alberta court and other regulatory and third party approvals and is expected to close shortly after the special meeting. An information circular is expected to be mailed out to Mart shareholders in May, 2015.

A supplemental press release will be issued in the event that a Definitive Agreement is entered into or the Letter of Intent is terminated. There can be no assurance that a Definitive Agreement will be entered into or that the Proposed Transaction will be consummated. Further, readers are cautioned that those portions of the Letter of Intent that describe the Proposed Transaction including the Proposed Offer Price are non-binding.

Additional information regarding Mart is available on the Company's website at www.martresources.com and under the Company's profile on SEDAR at www.sedar.com.

Forward Looking Statements and Risks

Certain statements contained in this press release constitute "forward-looking statements" as such term is used in applicable Canadian securities laws. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or are not statements of historical fact and should be viewed as "forward-looking statements". There are "Forward-looking statements" included in this press release that relate to the timing of the entering into of a definitive agreement, mailing of an information circular in relation to the transaction and closing of the transaction; and the anticipated terms and conditions of the definitive agreement. Such forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

There can be no assurance that such forward-looking statements will prove to be accurate as actual results and future events could vary or differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements contained in this news release. The forward-looking statements contained herein are expressly qualified by this cautionary statement. In particular, there is no assurance that the conditions set out in the Letter of Intent, including due diligence conditions will be satisfied, that Definitive Agreement will be entered into or that the Proposed Transaction. There is also no assurance that even if the Definitive Agreement is finalized and signed, that Midwestern will be able to complete the Proposed Financing, that any other conditions of closing specified in the Definitive Agreement will be satisfied or that the Proposed Transaction will be completed on the timelines indicated or at all. Accordingly, because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. Readers are cautioned that those portions of the Letter of Intent that describe the Proposed Transaction including the Proposed Offer Price are non-binding. The foregoing statements expressly qualify any forward-looking information contained herein.

Forward-looking statements are made based on management's beliefs, estimates and opinions on the date the statements are made and the Company undertakes no obligation to update forward-looking statements and if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable law.

Contact Information