PACIFIC NORTHERN Gas Ltd and AltaGas Ltd. have entered into a definitive 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 per cent to PNG's closing trading price on the TSX on Oct. 28 and a 28 per cent 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 the certainly 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.
"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 per cnet of PNG's shares on a fully diluted basis.