Advantage Energy Ltd. announces the terms of its substantial issuer bid (the "Offer") pursuant to which the Corporation will offer to purchase for cancellation up to $100,000,000 of its common shares (the "Shares"). The Offer will proceed by way of a modified Dutch auction and holders of Shares ("Shareholders") wishing to tender to the Offer may do so pursuant to: (i) auction tenders in which the tendering Shareholders specify the number of Shares being tendered at a specified price of not less than $11.20 and not more than $12.90 per Share in increments of $0.10 per Share; or (ii) purchase price tenders in which the tendering Shareholders do not specify a price per Share, but rather agree to have a specified number of Shares purchased at the purchase price to be determined as provided in the Offer (the "Purchase Price"). Shareholders who validly tender Shares without specifying the method in which they are tendering their Shares, will be deemed to have made a purchase price tender.
The Offer is expected to commence on November 10, 2022 and remain open for acceptance until 5:00 p.m. (Eastern Standard Time) on December 16, 2022, or at such later time and date to which the Offer may be extended or varied by the Corporation (the "Expiration Date"), unless withdrawn. The Offer would be for approximately 4.9% of the total number of issued and outstanding Shares if the Purchase Price is determined to be $11.20 (which is the minimum price per Share under the Offer) or approximately 4.3% of the total number of issued and outstanding Shares if the Purchase Price is determined to be $12.90 (which is the maximum price per Share under the Offer). As of November 7, 2022, there were 181,114,976 Shares issued and outstanding.
For purposes of determining the Purchase Price, Shareholders who make, or who are deemed to have made, a purchase price tender will be deemed to have tendered their Shares at the minimum price of $11.20 per Share. The Purchase Price to be paid by Advantage for each validly deposited Share taken up by the Corporation will be determined upon expiration of the Offer and will be based on the number of Shares validly deposited pursuant to auction tenders and purchase price tenders, and the prices specified by Shareholders making auction tenders. As a result, Shareholders who tender their Shares will set the Purchase Price for the Offer. The Purchase Price will be the lowest price (which will not be less than $11.20 per Share and not more than $12.90 per Share) that enables the Corporation to purchase Shares up to the aggregate amount of $100,000,000, determined in accordance with the terms of the Offer. All Shares purchased by Advantage pursuant to the Offer (including Shares tendered at auction prices below the Purchase Price) will be purchased at the same Purchase Price.
All Shares not purchased under the Offer (including Shares not purchased because of proration, invalid tender, or Shares deposited pursuant to auction tenders at auction prices in excess of the Purchase Price), or Shares properly withdrawn before the Expiration Date, will be returned to the Shareholders.
If the aggregate purchase price for Shares validly tendered pursuant to auction tenders and purchase price tenders is greater than the aggregate amount of $100,000,000, Advantage will purchase Shares from the Shareholders who made purchase price tenders or auction tenders at or below the Purchase Price as finally determined by Advantage on a pro rata basis, except that "odd lot holders" (Shareholders who own fewer than 100 Shares) will not be subject to proration.
Advantage expects to mail the formal offer to purchase, issuer bid circular, letter of transmittal, notice of guaranteed delivery and other related documents (collectively, the "Offer Documents") containing the terms and conditions of the Offer, instructions for tendering Shares, and the factors considered by Advantage and its Board of Directors in determining to approve the Offer, among other considerations, on or about November 10, 2022. The Offer Documents will be filed with the applicable securities regulators in Canada and may be accessed at www.sedar.com. Shareholders should carefully read the Offer Documents prior to making a decision with respect to the Offer. The Offer will not be conditional upon any minimum number of Shares being tendered. The Offer will, however, be subject to other conditions described in the Offer Documents and Advantage will reserve the right, subject to applicable laws, to withdraw, extend or vary the Offer, if, at any time prior to the payment for deposited Shares, certain events occur. As previously disclosed in the Corporation's news release dated November 2, 2022, the Corporation intends to fund the Offer with a combination of cash on hand and drawings on existing credit facilities. Advantage's Board of Directors has approved the making of the Offer. However, none of Advantage, its Board of Directors, the dealer manager or the depositary makes any recommendation to any Shareholder as to whether to deposit or refrain from depositing Shares under the Offer, how many Shares to deposit and whether to specify a price and, if so, at what price to deposit such Shares. Shareholders are urged to evaluate carefully all information in the Offer, consult their own financial, legal, investment and tax advisors and make their own decisions about whether to deposit Shares under the Offer, how many Shares to deposit and whether to specify a price and, if so, at what price to deposit such Shares.
The Offer referred to in this news release has not yet commenced. This news release is for informational purposes only and does not constitute an offer to buy or the solicitation of an offer to sell Shares. An offer to buy the Shares will only be made pursuant to the Offer Documents to be filed with the applicable securities regulators in Canada. The Offer will be optional for all Shareholders, who will be free to choose whether to participate, how many Shares to tender and, in the case of auction tenders, at what price to tender within the specified range. Any Shareholder who does not validly deposit any Shares (or whose Shares are not taken up and purchased by Advantage under the Offer) will realize a proportionate increase in such Shareholder's equity interest in Advantage, to the extent that Shares are purchased under the Offer.
Advantage has retained RBC Dominion Securities Inc. to act as financial advisor and dealer manager in connection with the Offer and Computershare Investor Services Inc. ("Computershare") to act as depositary. Any questions or requests for information may be directed to Computershare at 1 (800) 564-6253 (Toll-Free within North America) or 1 (514) 982-7555 (outside North America) or to RBC Dominion Securities Inc. as dealer manager for the Offer at advantagesib@rbccm.com.
