Western Prospector Group Ltd.

Western Prospector Group Ltd.

July 15, 2008 13:01 ET

Western Prospector Announces C$74 Million Cash Offer by Tinpo Holdings

Western Board Endorses C$1.34 Per Share Bid; Superior To C$0.58 Khan Bid

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 15, 2008) - Western Prospector Group Ltd. (TSX VENTURE:WNP) and Tinpo Holdings Industrial Company Limited ("Tinpo") announced today the execution of a definitive agreement for Tinpo to acquire all the outstanding common shares of Western for C$1.34 per share in cash, valuing Western's equity at approximately C$74 million.

The offer represents an 86% premium to Western's closing price of C$0.72 on July 14, 2008, and a 168% premium to Western's closing price of C$0.50 on May 9, 2008, which was the last trading day prior to the unsolicited takeover bid by Khan Resources Inc. The offer also represents a 130% premium to Khan's bid, which consists of 0.685 of a Khan share for each Western share. Khan's bid currently values Western at C$0.58 per Western share, based on Khan's trading price of C$0.85 on July 14, 2008. There is no cash component to the Khan bid.

Subject to the terms of the definitive agreement, the offer by Tinpo will be in the form of a takeover bid, whereby a subsidiary of Tinpo will acquire all of Western's outstanding shares. As a result, Western will effectively become a private company.

The definitive agreement provides for customary board support and non-solicitation covenants subject to customary "fiduciary out" provisions entitling Western to consider and accept an unsolicited superior offer, a five business day right to match in favor of Tinpo and the payment to Tinpo of a termination fee of approximately C$3.7 million if the acquisition is not completed in certain specified circumstances.

In connection with the offer, Tinpo is acting jointly with Anchorage Capital Master Offshore Ltd. ("Anchorage") and has entered into an agreement with Anchorage whereby Anchorage will acquire an equity interest in the offeror or an affiliate of the offeror in exchange for Anchorage's current holding of 10,257,610 Western common shares, representing approximately 19% of the Western shares outstanding. Under the agreement, subject to certain conditions including a matching right by Tinpo, Anchorage is entitled to accept an unsolicited superior offer. Tinpo does not itself hold shares of Western.

Based on the recommendation of Western's Special Committee and advisors, the Board of Directors unanimously recommends acceptance of the Offer. National Bank Financial Inc., the financial advisor to the Special Committee, has provided an opinion that the consideration to be offered to Western's shareholders is fair, from a financial point of view.

"After an extensive review of Western's strategic alternatives launched in response to Khan's unsolicited bid, the Tinpo offer was determined to be the most attractive option for Western's shareholders," said Gordon Pridham, Chairman of the Special Committee of Western's Board of Directors.

"We thank our shareholders for their support of Western's strategic plan thus far, and we are looking forward to working with Tinpo," said Eric Bohren, President and Chief Executive Officer. "Western's management team and employees are pleased to continue our work with potential strategic partners, the Government of Mongolia and other key stakeholders, toward the successful implementation of a uranium production strategy in Mongolia."

"Tinpo's offer represents a significant premium to the recent trading price of Western and to Khan's bid, and we believe that it offers a fair value for Western's assets. We are pleased that Western's Board of Directors unanimously supports this offer," said Howard Balloch, spokesperson for and Financial Advisor to Tinpo, a privately owned investment company based in Hong Kong.

Formal documentation relating to the takeover bid is expected to be mailed by Tinpo on or before July 29, 2008. The offer will be open for acceptance for a period of not less than 35 days and will be conditional upon valid deposits under the offer of Western common shares that, together with shares held by the offeror and its affiliates and joint actors, including Anchorage, represent at least 66 2/3% of the outstanding Western shares on a fully diluted basis. In addition, the offer will be subject to certain customary conditions and relevant regulatory approvals.

National Bank Financial Inc. is acting as financial advisor to Western and Bennett Jones LLP is acting as legal counsel to Western. The Balloch Group is acting as financial advisor to Tinpo and Goodmans LLP is acting as legal counsel to Tinpo.

Note Regarding Forward-Looking Statements

This press release and other written or oral communication from the Company may include certain statements that may be considered "forward-looking statements" within the meaning of that phrase under Canadian securities laws. Statements other than historical facts that address possible future events, plans or developments are forward-looking statements. Such statements may be identified by the use of words such as "will", ""may", "expects", "estimate", "intend" or the use of the future or conditional tense. Certain material factors or assumptions were applied in drawing our conclusions and making those forward-looking statements. Forward-looking statements reflect management's current views with respect to possible future events and conditions and, by their nature, are based on management's beliefs and assumptions and subject to known and unknown risks and uncertainties, both general and specific to the Company. Although the Company believes the expectations expressed in such forward-looking statements are reasonable, such statements are not guarantees of future performance and actual results or developments may differ materially from those in our forward-looking statements. Readers are cautioned that risks may change or new risks may emerge. Additional information regarding the material factors and assumptions that were applied in making these forward looking statements as well as the various risks and uncertainties we face are described in greater detail in the "Risk Factors" section of our annual and interim Management's Discussion and Analysis of our financial results and other continuous disclosure documents and financial statements we file with the Canadian securities regulatory authorities which are available at www.sedar.com and available on the Company's website at www.westernprospector.com. The Company undertakes no obligation to update this forward-looking information except as required by applicable law.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this news release.

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