Royal Helium and Imperial Helium announced that they have entered into an agreement dated May 2, 2022 to effect the arm's length acquisition of Imperial by Royal through a plan of arrangement.
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Under the terms of the Arrangement, Imperial Shareholders (as defined herein) will receive 0.614 of a Royal common share for each Imperial common share held, which equates to a 10.01% premium to Imperial shareholders based on the closing price for Imperial and Royal on April 29, 2022.
he board of directors and executive management teams of both Royal and Imperial believe that the Arrangement will provide significant benefits to the shareholders of both companies.
The Arrangement:
represents an attractive opportunity for Imperial Shareholders to own shares in a larger, more liquid publicly traded entity at an exchange ratio that implies a 10.01% premium to the current trading price of Imperial Shares;
allows Imperial Shareholders to participate in the exploration and development growth upside with Royal's 1 million+ acre helium land base comprised of over 10 separate potential helium fairways that has seen over $20 million of capital investment to date in the form of magnetic surveys, seismic surveys, geoscience and exploration drilling;
creates a larger entity with increased access to capital to enable the financing of ongoing exploration, development and processing plant expenditures;
represents the accretive acquisition of two ready-to-produce helium wells to bring on production along with Royal's Climax wells;
increases Royal's near-term production assets and expected early cash flow;
creates a logical consolidator of additional helium exploration and development opportunities with Imperial Shareholders expected to realize the benefit of being early shareholders;
creates an entity with significant indicative helium capacity enabling the expedition of offtake discussions and increased opportunity to monetize assets;
materially reduces Royal and Imperial's aggregate general and administrative costs;
creates an entity of a scale that is expected to be more relevant to international investors with the combination creating one of the largest diversified helium companies listed on a Canadian exchange; and
reduces the exploration risk of Imperial Shareholders by offering upside exposure to all of Royal's exploration lands. ■