O'Hara Administration Co., S.A.

May 25, 2015 19:28 ET

O'Hara Reiterates That Dissent Right Condition Agreed to by Pacific Rubiales Board Is a Free Option in Favour of Bidder; Condition Cannot Be Satisfied and Shareholders Should Vote No

PUNTA PACIFICA, PANAMA--(Marketwired - May 25, 2015) - O'Hara Administration Co., S.A. ("O'Hara") wishes to comment on the statement made on May 22, 2015 by a member of senior management of Pacific Rubiales Energy Corp. ("Pacific Rubiales"), that a condition in favour of the proposed acquirors, ALFA, S.A.B. de C.V. ("ALFA"), Harbour Energy Ltd. and Harbour Energy, L.P. (collectively, "Harbour"), allowing them to terminate their proposed acquisition of Pacific Rubiales at no cost if holders of more than 5 percent of the common shares dissent, is not an option to walk away from the proposed transaction.

On May 19, 2015, O'Hara issued a press release announcing that it and its joint actors, which together hold approximately 19.50% of the Pacific Rubiales common shares, intend to oppose the proposed acquisition. On May 21, 2015, O'Hara issued a further press release, announcing that it and its joint actors also intend to exercise dissent rights in respect of their shares. As a result, the condition to the proposed acquisition that holders of not more than 5 percent of the common shares exercise dissent rights cannot be satisfied.

Granting ALFA and Harbour a termination right if holders of more than 5 percent of the common shares dissent clearly represents a free option in favour of the bidders. O'Hara calls on management of Pacific Rubiales to explain why this option was given after O'Hara made known its opposition to the bid. O'Hara notes that the bidders refused to comment on whether they would waive the dissent rights condition.

In O'Hara's view, the granting of a 5% termination option in the face of O'Hara's stated opposition is further evidence of a poorly negotiated deal by Pacific Rubiales. Especially in light of the inducements apparently granted by Pacific Rubiales to the bidders on terms better than market, the bidders should have been required to waive the dissent rights condition, or the termination threshold should have been set significantly higher.

Shareholders should vote against the proposed acquisition and terminate it as soon as possible rather than give the bidders an option over Pacific Rubiales allowing them to terminate it in the third quarter.

O'Hara continues to review all options available to it to prevent the transaction from being completed.

Contact Information