|
Dear Subscriber,
|
Enter Date Here
|
Jul 22, 2008 14:40 ET
Kerry Holdings and MCS Holding to
Acquire QGX Ltd. for Cdn$5.00 Per Share
WATERDOWN, ONTARIO--(Marketwire - July 22, 2008) - QGX Ltd. (TSX:QGX)
("QGX" or the "Company") is pleased to announce that it
has entered into a definitive support agreement with Kerry Holdings Limited
("Kerry"), MCS Holding LLC ("MCS") and Mongolia Holdings
Corp. (the "Offeror") pursuant to which the Offeror will offer
(the "Offer") to acquire all of the issued and outstanding common
shares on a fully diluted basis (the "Shares") of QGX for
Cdn$5.00 per Share in cash. The Offer values QGX at approximately Cdn$259
million representing a 32% premium based on the volume weighted average
closing price of QGX's common shares on the TSX for the 20 previous days
ending July 21, 2008 and a premium of 52% to the last close before the
Company announced it was exploring strategic alternatives on February 12,
2008.
The Board of Directors of QGX, upon
the unanimous recommendation of a special committee of its directors, has
unanimously approved entering into the support agreement and recommends
that shareholders tender to the Offer. Additionally, QGX's Board has
received an opinion from Merrill Lynch Canada Inc., that the consideration
being offered is fair, from a financial point of view, to the shareholders
of QGX. Shareholders of QGX, including the directors and officers of QGX,
representing approximately 42% of the issued and outstanding common shares
of QGX on a fully diluted basis, have agreed to tender their shares,
subject to certain exceptions and have entered into lock-up agreements
evidencing such commitment.
The support agreement entered into by
QGX, Kerry, MCS and the Offeror provides for, among other things, a
non-solicitation covenant on the part of QGX, subject to customary
"fiduciary out" provisions that entitle QGX to consider and
accept a superior proposal, a right in favor of the Offeror to match any
superior proposal and the payment to the Offeror of a termination payment
of Cdn$9.1 million if the transaction is not completed as a result of a
superior proposal.
The transaction is to be effected by
way of a take-over bid. Full details of the Offer will be included in a
formal Offer and take-over bid circular, which will be mailed to
shareholders of QGX on or before August 20, 2008. The Offer, unless
extended, will expire 35 days thereafter with anticipated closing in
September 2008. The take-over bid circular will be accompanied by the
Company's directors' circular, which will provide shareholders of the
Company with, among other things, the rationale for the unanimous
recommendation of QGX's Board of Directors that shareholders accept the
Offer. The Offer will be subject to customary conditions including receipt
of all necessary regulatory approvals, absence of material adverse changes,
and acceptance of the Offer by not less than 66 2/3% of QGX shareholders on
a fully diluted basis.
Merrill Lynch Canada Inc. is acting as
sole financial advisor and Burnet, Duckworth & Palmer LLP is acting as
legal counsel to QGX.
J.P. Morgan Securities (Asia Pacific)
Limited is acting as sole financial advisor and Heenan Blaikie LLP is
acting as legal counsel to Kerry and MCS.
About Kerry Holdings Limited
Kerry is a private investment holding
company incorporated in Hong Kong. It is a member of the Kuok Group of
companies which has diversified businesses throughout the Asia Pacific
Region in commodities trading, sugar refining, property ownership and development,
hotel ownership and management, warehousing, shipping and transportation,
plantations, media, entertainment and leisure facilities. Kerry is a
substantial shareholder of Kerry Properties Limited, Shangri-La Asia
Limited and SCMP Group Limited, each of which are listed on the Hong Kong
Stock Exchange.
About MCS Holding LLC
Founded in 1993, MCS is one of
Mongolia's leading enterprises in six major industries, including energy
and infrastructure, information technologies, beverages, property
development, cashmere processing and mining. MCS is one of the largest
private sector companies in Mongolia, with over 3,200 employees as of June
2008.
About QGX Ltd.
QGX is a Canadian-based company that
has been exploring for mineral deposits in Mongolia since 1994. QGX's two
most advanced properties are the Baruun Naran and the Golden Hills
projects. QGX announced in August 2007 an independent NI 43-101 resource
for coking and thermal coal at Baruun Naran comprised of 93.3 Mt of
measured, 159.6 Mt of indicated (252.9 Mt contained in measured and
indicated) and 11.1 Mt of inferred resources. In April 2007, QGX filed an
independent NI 43-101 report outlining a positive preliminary economic
assessment for its copper-gold-silver project at Golden Hills. Barrick Gold
Corp. holds an approximate 9% equity interest in QGX as part of a strategic
relationship between the two companies.
Reader Advisory - Certain information
regarding QGX set forth in this news release including management's
assessment of the effect of the Offer on the Company and on shareholders of
QGX and timing of matters relating to the approval of the Offer and
implementation thereof, contain forward-looking statements that involve
substantial known and unknown risks and uncertainties. These
forward-looking statements are subject to numerous risks and uncertainties,
many of which are beyond the Company's control including, without
limitation, uncertainty related to the completion of the Offer and the
effect thereof and failure to receive required shareholder and other
regulatory approvals. QGX's actual results, performance or achievements may
differ materially from those expressed in, or implied by, these
forward-looking statements and, accordingly, no assurance can be given that
any events anticipated by the forward-looking statements will transpire or
occur. Furthermore, the forward-looking statements contained in this news
release are made as at the date of this news release and QGX does not
undertake any obligation to update publicly or to revise any of the forward-looking
statements, whether as a result of new information, future events or
otherwise, except as may be required by applicable securities laws.
The Toronto Stock Exchange has neither
approved nor disapproved the information contained herein.
|
|
|