Nova Bancorp Reports Growing Opposition to the Pace Arrangement
VANCOUVER, British Columbia, Feb. 11, 2013 (GLOBE NEWSWIRE) -- Nova Bancorp
Ltd. ("Nova Bancorp") is very encouraged by the growing opposition to the Pace
deal. On January 29, 2013, Nova Bancorp announced its plan to oppose the
business combination involving Pace Oil & Gas Ltd. (TSX:PCE), AvenEx Energy
Corp. and Charger Energy Corp. (the "Arrangement"). Pursuant to exemptive
relief from the Alberta Securities Commission that we obtained in order to
execute our plan, Nova Bancorp is permitted to make non-public solicitations
to not more than 15 Pace shareholders.Nova Bancorp has spoken with 8 of
Pace's largest shareholders.7 of these 8 shareholders have advised us that
they intend to vote against the Pace Arrangement.In addition, Nova Bancorp
has received unsolicited reports from other Pace shareholders who also intend
to vote no. There is clearly growing opposition to the
Arrangement.Shareholders are not satisfied with the deal or the management of
THIS DEAL CAN STILL BE STOPPED.
Only Three Days Left to Vote
Nova Bancorp urges Pace shareholders to vote against the Arrangement.
oVote against the Arrangement using the form of proxy or voting instruction
provided by Pace.
oThe cutoff for internet or telephone voting is 10:00 am Calgary time
Wednesday, February 13 to meet the Pace deadline of Thursday, February 14.
oShareholders using internet or telephone voting can change their voting
instructions more than once and at any time prior to the cutoff.
oDo not appoint Nova Bancorp Ltd., Jack Muir or Rick Wlodarczak as your
appointee.Leave blank or name another individual.
Four Reasons for Opposing the Pace Arrangement
1.The limited sale process was not adequate
Pace shareholders were not well served when Pace engaged its financial
advisor to "conduct a non-public, confidential, limited party sale
process."It's unacceptable that the result of this process was a non-arm's
length deal.Since the Arrangement was announced, Pace shares have fallen
more than 8% to close at $3.11 on Friday.
2.Pace shareholders would be unfairly diluted
The Arrangement is unfair to Pace shareholders on an absolute basis and a
relative basis.We estimate Break-up Value at $5.40 per share.In Q3 2012
the consensus target price of the six analysts covering Pace was $5.29.The
proposed exchange ratios also undervalue Pace's relative contributions to
the combined entity.While Pace represents 64% of combined cash flow, Pace
shareholders will only own 47% of Spyglass.
3.The proposed dividend is not sustainable
The Spyglass dividend will not be sustainable.This view is shared by other
analysts not involved in the transaction.Our modeling indicates that more
funds from operations will need to be invested in asset development at the
expense of dividends.
4.The Arrangement does not improve the management of Pace assets
The Arrangement looks more like a game of musical chairs than a serious
attempt to improve management and bolster market confidence.In addition,
the top five members of the Pace management team will receive cash payments
of $5.3 million.
Next Steps Part 2
Our press release of February 1, 2013 outlined some minimum changes that would
have to follow a no vote.We can confirm that there is a growing consensus
among a number of the largest Pace shareholders that significant changes must
be made if shareholder value is going to be maximized.Their focus on change
is coupled with an informed optimism that there's simply a better deal out
there.If the Arrangement is voted down by the shareholders including some of
the largest shareholders, Nova Bancorp believes thatPace should be receptive
to significant changes.If Pace was not receptive, Nova Bancorp and certain
other shareholders would be prepared to organize a second shareholder
This solicitation is being made by Nova Bancorp and not by or on behalf of the
management of Pace Oil & Gas Ltd.Except for certain non-public solicitations,
any solicitation will be made by broadcast, speech or publication.Nova
Bancorp will bear all the costs and expenses associated with such
solicitation.Affiliates or associates of Nova Bancorp own an aggregate of
108,200 Pace common shares ("Shares"), representing approximately 0.23% of the
total Shares issued and outstanding as of the record date.Nova Bancorp
Investments Ltd., an affiliate of Nova Bancorp owns 65,200 Shares.Jack Muir
and Rick Wlodarczak own or control an aggregate of 43,000 Shares.Messrs. Muir
and Wlodarczak are officers of Nova Bancorp and its affiliates.
Vote against the Arrangement using the form of proxy or voting instruction
provided by Pace. Shareholders may subsequently revoke such proxy in any
manner permitted by law. If you have previously voted on the form of proxy or
voting instruction form sent to you by Pace, you may revoke your vote by
voting on the internet, by fax, by mail or over the telephone (as available).
Only your latest dated form of proxy or voting instruction form will be
The address of Pace Oil & Gas Ltd. is 1700, 250-2 Street S.W., Calgary,
Alberta T2P 0C1.
Nova Bancorp is a member of Nova Bancorp Group (www.novabancorp.com), a
private investment company based in Vancouver.Nova Bancorp has considerable
experience with oil & gas investments and with shareholder activist
Certain statements in this press release contain forward-looking information
within the meaning of applicable securities laws in Canada ("forward-looking
information"). The words "anticipates", "believes", "budgets", "could",
"estimates", "expects", "forecasts", "intends", "may", "might", "plans",
"projects", "schedule", "should", "will", "would" and similar expressions are
often intended to identify forward-looking information, although not all
forward-looking information contains these identifying words.
The forward-looking information in this press release includes, but is not
limited to: the timing and holding of the Pace meeting and the future
prospects of Pace.
In connection with the forward-looking information contained in this news
release, Nova Bancorp has made numerous assumptions. While Nova Bancorp
considers these assumptions to be reasonable, these assumptions are inherently
subject to significant uncertainties and contingencies. Additionally, there
are known and unknown risk factors which could cause actual results,
performance or achievements to be materially different from any future
results,performance or achievements expressed or implied by the
forward-looking information contained herein.
All forward-looking information in this press release is qualified in its
entirety by this cautionary statement and, except as may be required by law,
Nova Bancorp undertakes no obligation to revise or update any forward-looking
information as a result of new information, future events or otherwise after
the date hereof.
CONTACT: Jack Muir
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