Boston, MA 05/02/2014 (wallstreetpr) – When things failed to work out as earlier expected, it was obvious that the acquisition deal between Equal Energy Ltd. (USA) (NYSE:EQU) and Petroflow was headed for a collapse if no extension of the deadline was secured. Thanks to the last minute agreement, the two companies decided to amend the deadline of the deal until July 31. However, the development did not impress everyone, especially Equal shareholders. Some investors had declared the deal time barred as early as April 30, although the expiration date of the agreement was May 1.
For example, Montclair Energy that holds about 10 percent stake in Equal called for the rejection of the deadline saying that the nearly six months wait time was more than enough. The investor has also previously made attempts to acquire Equal without success. The investor at one time offered $4 per share of Equal in an acquisition attempt and later improved the offer to $4.85 per share but failed in all the attempts. As a serial suitor, Montclair followed the talks between Equal and Petroflow closely. In any case, the investor called on Equal Energy Ltd. (USA) (NYSE:EQU) to terminate the deal and walk away with the $2 million break fee so that it could use the money to buy back shares. However, the extension of the deal deadline means that the reverse break fee will not come unless the second deadline goes without the deal being consummated.
Petroflow in the picture
Petroflow and Equal announced their interest to tie up back in December 2013. In view of the acquisition talks, Equal Energy Ltd. (USA) (NYSE:EQU) suspended its Q1 dividend payment. However, in the latest developments that led to the extension of the deal’s life, Equal said it would pay the dividend anyway. Therefore, the 5 cents dividend will be paid to the shareholders on May 28. The company said the other payment will be made upon the closure of the deal with Petroflow.
In the best interest
Petroflow offered to acquire all outstanding shares of Equal at $5.43 each. As such, the deal valued Equal at $230 million. According to Equal, the extension of the deal is in the best interest of the shareholders as it works to maximize shareholder value. Moreover, Equal Energy Ltd. (USA) (NYSE:EQU) chairman Michael Doyle said that the amendment of the deal allows for the matter to be put for voting before the shareholders.
