Texon Petroleum Limited (ASX:TXN) Demerger and Acquisition Scheme Proposals - Release of Scheme Documents

RELATED QUOTES

SymbolPriceChange
TXN.AX0.00

Brisbane, Australia, Jan 23, 2013 - (ABN Newswire) - On 13 November 2012, the Board of Texon Petroleum Limited (ASX:TXN.AX - News) announced two separate proposals designed to provide value for Texon shareholders. They are:

- a proposal to demerge by scheme of arrangement and list a Texon subsidiary, Talon Petroleum Limited (Talon), which would hold Texon's non Eagle Ford Shale (EFS) assets (the Demerger Scheme). Under the terms of the Demerger Scheme as now proposed, Texon shareholders will receive two Talon shares for every five Texon shares held at the record date; and

- a proposal for Sundance Energy Australia Limited (ASX:SEA.AX - News) to acquire by scheme of arrangement, after the implementation of the Demerger Scheme, all Texon shares (and thereby acquire Texon's EFS assets) in return for one new Sundance share for every two Texon Shares held at the record date (Acquisition Scheme).

The Federal Court of Australia has approved the dispatch of the explanatory booklets that will be sent to Texon shareholders in respect of each of the Demerger Scheme and Acquisition Scheme (Demerger Scheme Booklet and Acquisition Scheme Booklet) and ordered that Texon convene meetings of Texon shareholders to consider each scheme, with these meetings to be held on 25 February 2013. The Scheme Booklets have been lodged for registration with the Australian Securities and Investments Commission and are attached to this announcement.

The Scheme Booklets will now be printed and mailed to Texon shareholders.

Indicative dates for activities that are to be completed prior to the conclusion of the proposed transactions are set out below:

Date                Activity

25 February 2013    Scheme meetings to vote on
                    both Schemes

27 February 2013    Second Court Date for
                    Demerger Scheme and
                    Acquisition Scheme

27 February 2013    Effective Date for Demerger
                    Scheme and Acquisition
                    Scheme

                    Last day for trading of Texon
                    shares on ASX

28 February 2013    Commencement of trading in
                    Talon shares on a deferred
                    settlement basis

28 February 2013    Commencement of trading of
                    new Sundance shares on a
                    deferred settlement basis

7 March 2013        Implementation Date of
                    Demerger Scheme

8 March 2013        Implementation Date of
                    Acquisition Scheme
The Acquisition Scheme is conditional on the implementation of the Demerger Scheme, but, subject to obtaining the relevant approvals, the Demerger Scheme will proceed even if the Acquisition Scheme does not.

The Demerger Scheme and Acquisition Scheme must each be approved by Texon shareholders and by the Court. Separate meetings of Texon shareholders have been convened by the Court to consider each Scheme. The meetings will be held on 25 February 2013 commencing at 11.30am at the offices of Minter Ellison Lawyers at Level 22, Waterfront Place, 1 Eagle Street, Brisbane, 4000. There will also be an extraordinary general meeting of Texon shareholders held on the same day (General Meeting) to seek shareholder approval in relation to a reduction of capital, which must be approved before the Demerger Scheme can be implemented, and for the issue of up to 4,480,000 Talon shares to Wandoo Energy, LLC (Wandoo), which is part of the consideration payable to Wandoo for the transfer of certain carried working interests to Texon.

The Demerger Scheme meeting will be held first and it will be followed by the Acquisition Scheme meeting and the General Meeting in that order. For the Schemes to be approved, they must be passed by a majority in number of shareholders voting (in person or by proxy, attorney or corporate representative) whose votes represent at least 75% of the total number of votes cast on each Scheme approval resolution (whether in person or by proxy, attorney or corporate representative). The resolutions at the General Meeting must be passed by a majority vote only of those shareholders voting (in person or by proxy, attorney or corporate representative).

INDEPENDENT EXPERT'S REPORT

BDO Corporate Finance (QLD) Ltd (Independent Expert) was commissioned by the Texon Board to provide an independent expert's report in relation to each Scheme. BDO has concluded that, in the absence of further information or a superior proposal, both of the Demerger Scheme and the Acquisition Scheme are fair and reasonable and in the best interests of Texon shareholders.

The Independent Expert's Reports are included in and form part of the Demerger Scheme Booklet and Acquisition Scheme Booklet respectively. Texon shareholders are encouraged to read these documents in full.

RECOMMENDATIONS BY TEXON DIRECTORS

The Texon Directors unanimously recommend that shareholders vote in favour of both the Demerger Scheme and the Acquisition Scheme and the capital reduction resolution to be proposed at the General Meeting, in the absence of a Superior Proposal.

As noted in the Demerger Scheme Booklet, the Texon Directors' reasons for recommending that shareholders vote in favour of the Demerger Scheme include that:

- the separation of Texon's non-EFS assets from its EFS assets has the potential to unlock value not currently reflected in Texon's share price;

- if the Demerger Scheme is not approved then the Acquisition Scheme cannot proceed and Texon shareholders would not receive the Acquisition Scheme consideration; and

- the Demerger Scheme provides investors with greater choice regarding exposure they have to Texon's EFS and non-EFS assets.

Detailed discussion of the advantages and disadvantages of the Demerger Scheme is contained in Section 3 of the Demerger Scheme Booklet.

As noted in the Acquisition Scheme Booklet, the Texon Directors' reasons for recommending that shareholders vote in favour of the Acquisition Scheme include that:

- the Acquisition Scheme will deliver greater benefits to Texon shareholders than any other alternative currently available;

- the Acquisition Scheme will create a leading mid-tier oil and gas company with considerable growth potential; and
- the implied premium of the consideration payable under the Schemes will deliver a significant premium to Texon shareholders.

Detailed discussion of reasons to vote for and against the Acquisition Scheme is contained in Section 3 of the Acquisition Scheme Booklet.

The recommendations made by the Texon Directors that Texon shareholders vote in favour of the Demerger Scheme and the capital reduction resolution at the General Meeting is made irrespective of whether Texon shareholders intend to vote in favour of the Acquisition Scheme.

All Texon Directors who hold or control Texon Shares intend to vote in favour of the Demerger Scheme, the Acquisition Scheme and the capital reduction resolution to be considered at the General Meting in respect of all their Texon Shares, in the absence of a Superior Proposal.

The Texon Directors (other than David Mason, who is the majority shareholder in Wandoo and declines to make a recommendation) also recommend that shareholders vote in favour of the resolution to issue up to 4,480,000 Talon shares to Wandoo.

SHAREHOLDER PARTICIPATION

The Scheme Booklets contain important information about the two proposals which shareholders are being asked to consider.

Shareholders should read the booklets carefully and in their entirety.

ACTION REQUIRED

Texon shareholders are encouraged to attend the meetings to be held on 25 February 2013 in person or, alternatively, to vote by completing and lodging the personalised proxy form that will be sent to each Texon shareholder with the Demerger and Acquisition Scheme Booklets. Further details regarding attendance and voting at the meetings to be held on 25 February 2013 can be found in the notices of meeting included as part of the Scheme Booklets.

Texon shareholders with any questions in relation to either the Demerger Scheme or Acquisition Scheme are encouraged to contact the Texon Shareholder Information Line on 1300 378 879 (within Australia) or +61 3 9415 4012 (outside Australia) Monday to Friday between 8.30am and 5.00pm (Brisbane time).


About Texon Petroleum Ltd:

Texon Petroleum Limited's (ASX:TXN.AX - News) goal is to find commercially producible oil and gas by drilling 3D seismic controlled high equity prospects which have targets analogous to adjacent producing wells on established oil and gas producing trends in Texas.

Contact:

 
Texon Petroleum Ltd
T: +61 7 3211 1122 
F: +61 7 3211 0133
E: texon.info@texonpetroleum.com.au
WWW: www.texonpetroleum.com.au
 

Source:

Texon Petroleum Ltd

Copyright (C) 2013 ABN Newswire. All rights reserved.

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