Wenzel Downhole Tools Ltd.

Wenzel Downhole Tools Ltd.

July 16, 2013 20:01 ET

Wenzel Downhole Tools Ltd. Announces Postponement of Special Meeting and Mailing of Addendum to the Information Circular in Connection with the Special Meeting

CALGARY, ALBERTA--(Marketwired - July 16, 2013) - Wenzel Downhole Tools Ltd. (TSX:WZL) ("Wenzel" or the "Company") announces that the Court of Queen's Bench of Alberta (the "Court") granted a further interim order to Wenzel on July 16, 2013 (the "Second Interim Order") to adjourn its forthcoming special meeting of the securityholders of Wenzel until 10:00 a.m. (Calgary time) on July 30, 2013 (the "Reconvened Meeting").


On July 10, 2013, the Company announced that Raymond James Ltd. ("Raymond James") had become aware of a technical error in its valuation of the Company (the "Valuation") and determined it was necessary to correct the Valuation. It also announced that the Company intended to adjourn and postpone its previously announced special meeting of the shareholders ("Shareholders"), optionholders ("Optionholders") and the holder of series 1 preferred shares of Wenzel (collectively with the Shareholders and Optionholders, the "Securityholders"), scheduled for July 19, 2013, to allow for distribution of a correction to the Valuation range to the Securityholders.

On July 16, 2013, Wenzel obtained the Second Interim Order, approving the adjournment of the July 19, 2013 Securityholder meeting to 10:00 a.m. (Calgary time) on July 30, 2013, as well as providing directions to the Company with respect to the Reconvened Meeting. In accordance with the terms of the Second Interim Order, the Company will convene the July 19, 2013 Securityholders meeting and will promptly adjourn it to July 30, 2013 without any business taking place regardless of whether or not a quorum is present on July 19, 2013.

The Reconvened Meeting

The Reconvened Meeting of Securityholders will be held at 10:00 a.m. (Calgary time) on July 30, 2013 in the Imperial Ballroom of Hyatt Regency Calgary at 700 Centre Street S.E., Calgary, Alberta, Canada. The record date for the Reconvened Meeting remains June 10, 2013.

The Addendum to the Information Circular

In accordance with the terms of the Second Interim Order, on July 17, 2013 Wenzel will mail an addendum (the "Addendum") to the information circular of the Company dated June 17, 2013 (the "Information Circular") to all Securityholders who received the original meeting materials.

The Addendum provides, among other things: (i) formal notice of the Reconvened Meeting; (ii) an amended notice of originating application to the Court; (iii) further information with respect to the revised valuation and fairness opinion of Raymond James dated July 10, 2013 (the "Revised Valuation and Fairness Opinion"); (iv) the recommendation of the board of directors of Wenzel (the "Board") to Shareholders and Optionholders; (v) details relating to the return of proxies; (vi) Shareholder dissent rights; and (vii) information on the application to the Court for the final order approving the statutory plan of arrangement (the "Arrangement") under section 193 of the Business Corporations Act (Alberta) involving the Company, Basin Tools, L.P. and 1748017 Alberta Ltd.

The Addendum, together with the appendices attached thereto and the documents incorporated by reference therein, should be read in conjunction with the Information Circular, which shall remain unamended except to the extent modified or updated by the Addendum.

No Change to Arrangement or Special Resolution

There is no change to the terms of the Arrangement as described in the Information Circular as a result of the Revised Valuation and Fairness Opinion or the Second Interim Order. At the Reconvened Meeting, the Securityholders will be asked to consider, and if deemed advisable, to pass a special resolution (the "Special Resolution") approving the Arrangement.

Proxies for Reconvened Meeting

The forms of proxy and letter of transmittal that were previously sent with the Information Circular remain valid for the Reconvened Meeting. If a Securityholder has already submitted his/her/its proxy and does not wish to change his/her/its vote on the Special Resolution approving the Arrangement, no further action is required on such Securityholder's part and his/her/its vote will be counted at the Reconvened Meeting in accordance with the proxy that such Securityholder has already submitted.

For convenience purposes only, a duplicate proxy reflecting the date of the Reconvened Meeting will accompany the Addendum (the "Duplicate Proxy"). The Duplicate Proxy can be used by a Securityholder in the event that such Securityholder has yet to vote and has misplaced the original proxy or if such Securityholder wishes to change his/her/its vote on the Special Resolution.

Due to the adjournment of the forthcoming special meeting of the Securityholders to July 30, 2013, the Company has extended the deadline for the delivery of proxies. If a Securityholder has not already submitted his/her/its proxy or wishes to change his/her/its vote on the Special Resolution, such Securityholder should complete and sign the Duplicate Proxy and return it to Computershare Trust Company of Canada, 9th Floor, 100 University Avenue, Toronto, Ontario, M5J 2Y1, Attention: Proxy Department by mail no later than 10:00 a.m. (Calgary time) on July 26, 2013, or at least 48 hours (other than a Saturday, Sunday or holiday) prior to the time set for any adjournment or postponement of the Reconvened Meeting. Registered Shareholders and Optionholders may also use the internet site www.investorvote.com to transmit their voting instructions.

The Final Order

The application for the final order in connection with the Arrangement is scheduled to be heard by the Court on July 30, 2013 at 2:00 p.m. (Calgary time), or as soon thereafter as counsel may be heard, at the Calgary Court Centre, 601 - 5th Street S.W., Calgary, Alberta. At the hearing, any Securityholder or any other interested party desiring to appear at the hearing for the final order is required to file with the Court, and serve upon the Company on or before 5:00 p.m. (Calgary time) on July 26, 2013, a notice of intention to appear, including an address for service in the Province of Alberta, indicating whether such Securityholder or other interested party intends to support or oppose the application or make submissions thereat, together with a summary of the position such Securityholder or other interested party intends to advocate before the Court and any evidence or materials which are to be presented to the Court by such Securityholder or other interested party. Service of such notice shall be effected by service upon the solicitors for the Company: Gowling Lafleur Henderson LLP, 1400, 700 - 2nd Street S.W., Calgary, Alberta, T2P 4V5, Attention: Gregory Peterson.

Revised Valuation and Fairness Opinion

On July 7, 2013, Raymond James provided verbal notice to the special committee of the Board (the "Special Committee") of a technical error in its treatment of the Company's tax pools within Raymond James' discounted cash flow analysis in the Valuation and that, as a result of such technical error, Raymond James had determined to revise the Valuation. As announced in a press release issued by the Company on July 10, 2013, after correcting the technical error, Raymond James delivered its Revised Valuation and Fairness Opinion that as of March 31, 2013, and based upon and subject to the assumptions and limitations noted in the Revised Valuation and Fairness Opinion, the fair market value of the Common Shares was in the range of $2.16 to $2.46 per Common Share. Notwithstanding the correction to the valuation range, in the opinion of Raymond James, based upon and subject to the assumptions and limitations contained in the Revised Valuation and Fairness Opinion, as of June 17, 2013, the $2.25 per Common Share in cash to be paid to the Shareholders pursuant to the Arrangement is fair, from a financial point of view, to the Shareholders other than Basin and its affiliates.

Recommendation of Special Committee and Board of Directors

The Special Committee has reviewed the revised Valuation and Fairness Opinion and considered it along with the other reasons pursuant to which it originally recommended to the Board that it recommend the Arrangement to the Shareholders and Optionholders, and has reconfirmed its recommendation to the Board.

Based on the recommendation of the Special Committee and other considerations, the members of the Board voting on the resolution reconfirm, and unanimously recommend that Securityholders vote "FOR", the Special Resolution in respect of the Arrangement.

Further Information

The Addendum and the Information Circular are important and require your immediate attention. They require Securityholders to make important decisions. If you are in doubt as to how to make such decisions, please contact your financial, legal, tax or other professional advisor. If you are a Securityholder of Wenzel and have any questions or require more information, or require a copy of the Information Circular, please contact Wenzel's proxy solicitation agent, CST Phoenix Advisors, by (1) toll-free telephone in North America at 1-800-761-6534 or collect call at 201-806-2222, or (2) by email at inquiries@phoenixadvisorscst.com, regarding matters to be considered at the Reconvened Meeting and/or regarding the procedure for voting your securities, whether acquired before OR AFTER the record date of June 10, 2013.

About Wenzel Downhole Tools Ltd.

The Company is a designer, manufacturer, seller and renter of drilling tools used in oil and gas exploration that operates in Canada, the United States and internationally; its shares trade on the Toronto Stock Exchange under the symbol "WZL".

The Company's Canadian sales, manufacturing and servicing facilities are located in Edmonton, Alberta and its US sales and servicing facilities are located in Conroe, Texas; Odessa, Texas; Morgantown, West Virginia; Casper, Wyoming and Oklahoma City, Oklahoma. It also has a sales and service facility in Celle, Germany. The main corporate office is located in Calgary, Alberta.

Forward-Looking Statements

Certain statements contained in this press release constitute "forward-looking statements". These statements are based on current beliefs and assumptions of management, however are subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from the forward-looking statements in this press release.

Forward-looking statements in this press release may include, without limitation, timing for completion of the Arrangement. In addition to other expectations and assumptions which may be identified in this press release, assumptions have been made regarding and are implicit in, among other things, the timely receipt of any required regulatory approvals (including Court and shareholder approvals). Readers are cautioned that the foregoing list is not exhaustive of all expectations and assumptions which have been used. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements 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. For additional information with respect to certain of these beliefs, assumptions, risks and uncertainties, please refer to The Company's Annual Information Form for fiscal 2012 available on SEDAR at http://www.sedar.com. Forward-looking statements are based on estimates and opinions of management of the Company at the time the statements are presented. The Company may, as considered necessary in the circumstances, update or revise such forward-looking statements, whether as a result of new information, future events or otherwise, but the Company undertakes no obligation to update or revise any forward-looking statements, except as required by applicable securities laws.


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