CALGARY, ALBERTA--(Marketwired - Dec. 23, 2016) - The Board of Directors of Savanna Energy Services Corp. ("Savanna" or the "Company") (TSX:SVY), on the recommendation of the Special Committee, has unanimously determined that the offer from Total Energy Services Inc. ("Total") to purchase all of the common shares of Savanna on the basis of 0.13 common shares of Total for each common share of Savanna significantly undervalues the common shares of Savanna, is not in the best interests of Savanna or its shareholders and that shareholders should reject the offer.
"The Total offer significantly undervalues Savanna, and is not in the best interest of the Company and its shareholders," said Jim Saunders, Chair of the Savanna Board and Chair of the Special Committee. "This unsolicited takeover offer is highly opportunistic and timed to deprive Savanna shareholders of the value of significant positive recent market changes and the actions Savanna has taken to solidify the Company's balance sheet, reduce its risk profile and position the company to participate in the recovery of industry conditions. Total's proposed share exchange also implies a current discount of 5% when over the past five years transactions of this nature have carried a premium of approximately 40% at the time of the offer. Our Board of Directors urges shareholders to reject Total's undervalued offer."
Peters & Co. Limited has provided its opinion to the Special Committee and Board of Directors of Savanna that the consideration offered pursuant to Total's offer is inadequate, from a financial point of view, to shareholders of Savanna.
The basis for the Board's recommendation is contained in a Savanna Directors' Circular which is available on the Savanna website at http://www.savannaenergy.com and at www.sedar.com, and which will be mailed to shareholders today. The Savanna Directors' Circular also provides a complete background to the Total offer.
As previously announced, under the supervision of the Special Committee, Savanna's management, with the assistance of its financial and legal advisors, intends to conduct a formal process to explore the full range of strategic alternatives, which may include a merger or partnership with strategic or financial partners, a sale reflecting full and fair value for shareholders of Savanna or an acquisition by Savanna, with a view to maximizing value for all shareholders of Savanna.
Rejecting the Total offer requires Savanna shareholders to DO NOTHING.
Savanna is a leading North American and Australian contract drilling and oilfield services company providing a broad range of drilling, well servicing and related services with a focus on fit for purpose technologies and industry-leading aboriginal relationships.
Cautionary Statement Regarding Forward-Looking Information and Statements
This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. More particularly and without limitation, this press release contains forward-looking statements and information relating to conducting a strategic alternatives process, mailing of the Directors' Circular and positioning of the Company to take advantage of an industry recovery. These forward-looking statements and information are based on certain key expectations and assumptions made by Savanna. Although Savanna believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information as Savanna cannot give any assurance that they will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with general economic conditions, there may not be any alternative transactions or the terms and conditions of any alternatives may not being acceptable to the Company, the demand for Savanna's services, volatility in market prices for oil and natural gas and the effect of this volatility on the demand for oilfield services generally, currency exchange rate risk, changes in legislation, dependence on, and concentration of, major customers, and the creditworthiness and performance by the Company's counterparties and customers.
Readers are cautioned that the foregoing list of risks and uncertainties is not exhaustive. Additional information on these and other risk factors that could affect Savanna's operations or financial results are included in Savanna's annual information form and may be accessed through the SEDAR website (www.sedar.com). The forward-looking statements and information contained in this press release are made as of the date hereof and Savanna does not undertake any obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.