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Eco Atlantic Oil & Gas Ltd - Toronto-based oil and gas exploration company - Cancels proposed USD52 million cashless acquisition of 100% of JHI Associates Inc, a Guyana-focused deepwater exploration company.
JHI holds a 17.5% participating interest in the Canje Block offshore Guyana.
"While all the main commercial points were agreed upon in keeping with the commercially binding term sheet announced on March 14, including the proposed issuance of 127 million new common shares of Eco to JHI shareholders, it was not possible to agree on the terms of lock-up arrangements required by Eco, designed to restrict and control any subsequent immediate sale of the consideration shares to be issued to the shareholders of JHI, to provide Eco Atlantic's shareholders with the appropriate levels of protection in such a transaction," company explains.
JHI shareholders were set to receive 1.2 new Eco shares for each JHI share held for around 127 million new shares, giving it around 34% of Eco's enlarged share capital.
Co-Founder and Chief Executive Gil Holzman says: "With the exclusivity period of our JHI negotiations ending last night, we have terminated the JHI proposed acquisition. We are unable to proceed without the appropriate protection for our shareholders that such lock-up arrangements were designed to provide.
"We look forward to remaining a significant shareholder in JHI with over 7% of the company and, as such, retain exposure to the potential of the Canje Block. We wish the JHI management the best of luck in growing and monetizing the business to benefit all shareholders. Notwithstanding termination of discussions, we and JHI may re-evaluate the proposed acquisition at a future date."
Current stock price: 27.83 pence
12-month change: up 11%
By Paul McGowan; paulmcgowan@alliancenews.com
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