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Delta Oil Reaches Greement To Acquire Mart Acquire Mart Resources

Mart Resources has declared that it has entered into an arrangement agreemet with Delta Oil Nigeria.

Under the terms of the agreement an indirect wholly-owned subsidiary of Delta will acquire all of the issued and outstanding common shares of Mart by way of a plan of arrangement.

Each Mart shareholder will receive CAD$0.35 in exchange for each Mart common share held for aggregate consideration of all Mart shares of approx. CAD$124.92 million. At closing, Mart is expected to have approximately $200.5 million of outstanding bank debt.

The Per Share Consideration represents an 84% premium to the closing price and an 86% premium to the 20 day VWAP price of Mart’s common shares on the Toronto Stock Exchange (TSX) on October 15, 2015; however it is lower than the price agreed upon in the recently terminated deal between Mart and Midwestern Oil & Gas.

Mart’s board considered the arrangement to be fair in light of the significant worsening of the broader macro-environment for emerging market exploration and development companies, including forecast oil prices being $15-$20 per barrel lower than when the previous offer was made.

There was also the increased volatility of net cash flows from Mart’s current operations and the significant constraints on available working capital due to Mart’s ongoing obligations to service the company’s significant level of debt that made the deal hard to turn down.

Delta intends to use a combination of cash on hand and the bank financing to fund the cash consideration.

Delta is in the process of arranging bank financing with a pre-eminent global financial institution and accordingly, the arrangement is subject to a financing condition.

Like the deal that fell through with Midwestern, Delta has agreed to use reasonable commercial efforts to satisfy the Financing Condition and to keep Mart informed as to the status and timing of the satisfaction of the Financing Condition.

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