Pacific Northern Gas Ltd.

Pacific Northern Gas Ltd.

October 31, 2011 07:30 ET

PNG to be Acquired by AltaGas Ltd. for $36.75 Cash Per Common Share

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 31, 2011) - Pacific Northern Gas Ltd. (TSX:PNG) (TSX:PNG.PR.A) and AltaGas Ltd. have entered into a definitive agreement (the "Agreement") pursuant to which a wholly-owned subsidiary of AltaGas will acquire all of the issued and outstanding common shares of PNG for $36.75 in cash in respect of each common share of PNG.

The cash consideration represents a premium of 20% to PNG's closing trading price on the TSX on October 28, 2011, and a 28% premium based on the volume weighted average trading price of PNG shares on the TSX for the 20 prior trading days. The proposed transaction values PNG at approximately $230 million.

"The Board of Directors of PNG has determined that the proposed transaction represents a compelling opportunity for our shareholders to achieve full and fair value for their PNG shares," said Robert Chase, PNG's Chairman. "Following the sale of PNG's interest in Pacific Trail Pipelines in February 2011, a Special Committee of the Board of Directors undertook a thorough review of PNG's strategic alternatives. After careful consideration of these alternatives, including a recommendation from the Special Committee and advice from our financial advisor, the Board of Directors of PNG unanimously recommends that shareholders vote in favour of the proposed transaction."

Roy Dyce, President and CEO of PNG, added, "This transaction is in the best interests of our shareholders, customers, employees and other stakeholders. Among the reasons we recommend the proposed transaction to our shareholders are the size of the premium, the immediate liquidity and certainty of value the cash consideration offers, and the fact that we believe AltaGas' offer fairly values the $20 million contingent payment that PNG will receive if the Kitimat liquefied natural gas project proceeds."

Roy Dyce continued, "We look forward to joining with AltaGas in continuing our mutual history of delivering safe, reliable service to our customers. AltaGas' proven capabilities will enhance PNG's ability to realize its potential growth opportunities."

PNG's largest shareholder, together with the PNG directors and senior officers who hold PNG shares, have agreed to support the transaction and vote their shares in favour of the transaction. These shareholders collectively own or exercise control or direction over approximately 25% of PNG's shares on a fully diluted basis.

Transaction Details

The proposed transaction will be carried out by way of a court-approved plan of arrangement, the implementation of which will be subject to approval by at least two-thirds of the votes cast at a special shareholders meeting of PNG shareholders expected to be held on or about December 12, 2011, and by a majority of the 'minority' shareholders voting at the meeting, followed by and subject to the approval of the Supreme Court of British Columbia. Pursuant to the terms of the Agreement, the proposed transaction is also subject to a number of other customary conditions, including regulatory approval by the British Columbia Utilities Commission. If approved, the transaction is expected to close on or about December 13, 2011. Under certain specified circumstances, such as where PNG enters into a definitive agreement with respect to a superior proposal, a termination fee of $5 million is payable by PNG to AltaGas.

BMO Capital Markets is acting as exclusive financial advisor to PNG and provided the Special Committee and Board of Directors with an opinion that the consideration to be received by PNG shareholders pursuant to the proposed transaction is fair, from a financial point of view, to PNG shareholders. Farris, Vaughan, Wills & Murphy LLP is acting as legal counsel to PNG.

The terms and condition of the proposed transaction will be summarized in PNG's management information circular, which will be filed and mailed to shareholders of PNG by mid-November 2011. Copies of the Agreement and certain related documents will be filed with Canadian securities regulators and will be available on the SEDAR website at The management information circular will also be available at Shareholders are urged to read the information circular once it is available.

Shareholders who require assistance with regard to the offer are asked to consult their financial, legal or other professional advisor. For questions regarding the procedures for voting or completing transmittal documentation, shareholders are asked to please contact Computershare Investor Services Inc., Proxy Dept., 100 University Avenue, 9th Floor, Toronto, Ontario M5J 2Y1, by telephone at 1-800-564-6253 toll-free in North America, 514-982-7555 outside of North America, or via

Forward-looking statements

This news release contains forward-looking statements relating to the acquisition of PNG. All forward-looking statements are based on management's beliefs and assumptions based on information available at the time the assumption was made and on its experience and perception of historical trends, current conditions and expected further developments as well as other factors deemed appropriate in the circumstances. Management of PNG believe the expectations reflected in such statements are reasonable but no assurance is given that such expectations will be correct as forward-looking information is subject to various risks and uncertainties that are known and unknown, including those material risks discussed in PNG's MD&A and in its 2010 Annual Information Form. In particular, but without limitation, there are no assurances that the required regulatory approvals will be obtained, that the other conditions to closing will be satisfied or that of the acquisition of PNG by AltaGas will be completed.

About Pacific Northern Gas

Headquartered in Vancouver, British Columbia, PNG (TSX:PNG) (TSX:PNG.PR.A) owns and operates natural gas transmission and distribution systems. PNG's western transmission line extends from the Spectra Energy gas transmission system north of Prince George to tidewater at Kitimat and Prince Rupert, and provides service to 12 communities and a number of industrial facilities. In the northeast, PNG's subsidiary Pacific Northern Gas (N.E.) Ltd. provides gas distribution service in the Dawson Creek, Fort St. John and Tumbler Ridge areas. Further information is available on PNG's website at:

About AltaGas

AltaGas is an energy infrastructure business with a focus on natural gas, power and regulated utilities. AltaGas creates value by acquiring, growing and optimizing its energy infrastructure, including a focus on renewable energy sources. AltaGas' regulated utilities serve end-users in Alberta, Nova Scotia and Inuvik, Northwest Territories. The Utility business is comprised of 100 percent interests in AltaGas Utilities Inc. (AUI), the Alberta utility business and Heritage Gas, the Nova Scotia utility business, a one-third interest in Inuvik Gas Ltd. (Inuvik Gas) and a 33.3335 percent interest in the Ikhil Joint Venture (Ikhil). For more information visit:

Contact Information

  • Pacific Northern Gas Ltd. - Investor Inquiries:
    Kevin Teitge
    Vice President, Corporate Development & Treasurer
    (604) 691-5689

    Pacific Northern Gas Ltd. - Media Inquiries:
    Greg Weeres, P.Eng.
    Vice President, Operations & Engineering
    (604) 691-5677