First Calgary board approves Eni's bid to buy convertibles for 108

By Susanna Moon

Chicago, Sept. 8 - First Calgary Petroleums Ltd. said Eni SpA has agreed to acquire all of the company's convertible bonds for 108% of par plus accrued interest.

The company said its board of directors unanimously approved the proposal and recommended that shareholders and bondholders also approve the deal.

The completion of the deal requires approval by 75% of bondholders and approval of 66 2/3% by shareholders. The deal is expected to be completed at the end of the fourth quarter.

Under the definitive agreement, shareholders will receive C$3.60 per share in cash.

The proposed price represents a 52.5% premium to the company's (Toronto: FCP) closing price of C$2.36 on Sept. 2, the trading day before the company's announcement, and a 59.2% premium to the 30-day weighted average trading price of C$2.26 per share before Sept. 2.

Directors, officers and certain shareholders of First Calgary, including Waterford Finance & Investment Ltd. with 18.3% of outstanding shares, have agreed to support and vote in favor of the deal, according to a press release.

The definitive agreement prohibits First Calgary from soliciting or initiating any discussions concerning any other business combination but allows its board of directors to accept and recommend a superior proposal if it is required to do so to avoid breaching its fiduciary duties and upon payment of a break-up fee of C$28.2 million.

First Calgary is a Calgary, Alta.-based oil and gas drilling company.

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