Tenergy Ltd.
TSX : TGY

Tenergy Ltd.

January 30, 2006 06:00 ET

Quintana Canada Corp. and Tenergy Ltd. Announce Agreement on Quintana Offer to Purchase Tenergy Shares

CALGARY, ALBERTA--(CCNMatthews - Jan. 30, 2006) - Quintana Canada Corp. ("Quintana") and Tenergy Ltd. ("Tenergy")(TSX:TGY) jointly announced that they have entered into an agreement pursuant to which Quintana or its nominee will make an offer to purchase all of the issued and outstanding common shares of Tenergy (the "Offer") for a cash consideration of $6.30 (Cdn) per share. The aggregate value of the Offer, net of cash is approximately $76 million (Cdn). The Offer represents a 49% premium above Tenergy's ten day weighted average share price of $4.23 on the Toronto Stock Exchange.

The directors, officers and certain shareholders of Tenergy holding approximately 13.2% of the issued and outstanding common shares of Tenergy (calculated on a diluted basis) have signed agreements pursuant to which they have agreed to tender all of their shares to the Offer and to either surrender any options or warrants held by such holders for a cash payment or tender the shares received on exercise of such options or warrants to the Offer. Such shareholders have also agreed not to, directly or indirectly, make, solicit, initiate, facilitate, encourage or participate in any inquiries, proposals or offers from, or engage in any discussions or negotiations with, any person other than Quintana relating to their shares.

The Offer has the unanimous support of the Boards of Directors of both Quintana and Tenergy. In addition, the Board of Directors of Tenergy has been advised by GMP Securities L.P. that, subject to review of formal documentation, the consideration offered under the Offer is fair, from a financial point of view, to the shareholders of Tenergy. The Board has determined that the Offer is in the best interests of Tenergy and its shareholders, and will recommend that Tenergy shareholders accept the Offer. CIBC World Markets Inc. acted as financial advisor to Quintana.

The agreement provides that Tenergy will pay Quintana a non-completion fee of $3.5 million in certain circumstances. In addition, Tenergy has agreed not to solicit further offers and has reserved the right to respond to a superior proposal in accordance with the terms of the agreement with Quintana. The offering circular associated with the transaction is expected to be mailed to Tenergy's shareholders shortly and the Offer will expire 35 days thereafter. The Offer is conditional on, among other things, at least 66 2/3 % of the Tenergy common shares (calculated on a diluted basis) being tendered and receipt of all necessary regulatory approvals and consents, and on conditions customary in transactions of this nature.

First Reserve Corporation and Quintana Minerals Corporation will jointly own the acquiring company. First Reserve will own a majority interest in the new venture. Founded in 1980, First Reserve is the largest private equity firm specializing in the energy industry with $4.7 billion under management in four active funds. First Reserve is based in Greenwich, Connecticut and also has offices in Houston, Texas and London, England. Quintana Minerals Corporation is a private company headquartered in Houston, Texas.

Contact Information

  • Tenergy Ltd.
    Jan Alston
    (403) 261-3399
    or
    Tenergy Ltd.
    Bruce Murray
    (403) 261-3399
    Website: www.tenergy.com
    or
    Quintana Canada Corp.
    Harvey Klingensmith
    (403) 355-3369