Several weeks ago, the oil and natural gas company Transmeridian Exploration Inc., formed by Chief Executive Lorrie T. Olivier, and its BVI-registered subsidiary Trans Meridian International, Inc. (TMI) entered into a definitive merger agreement pursuant to which TMI, through its wholly owned subsidiary, will make a tender offer of $3 per share, to purchase all of company’s outstanding shares of common stock.
The $3.00 per share cash consideration is 114% more than the $1.40 closing price of Transmeridian’s common stock on December 28, 2007, and implies an enterprise value of the company in the amount of approximately $825 million.
The purpose of tender offer is to acquire for cash as many outstanding shares of Transmeridian as possible, as a first step in a ‘going private’ transaction resulting in the BVI company acquiring the entire equity interest in Transmeridian. Actually, the merger agreement permits Transmeridian to solicit competing offers until the time when Trans Meridian is able to provide financing. The company may terminate the agreement in case it receives any superior proposals, and is not required to pay any termination or break-up fees to the BVI-based Trans Meridian International, except for reimbursement of expenses up to $3 million.
Also, Transmeridian has the right to terminate the agreement without liability at any time after January, 31, if the BVI company still has not secured financing. TMI may terminate the merger agreement at any time after February 29, 2008 if this condition is not satisfied. In either of these cases, TMI would incur no liability to Transmeridian.
Transmeridian Exploration Incorporated is focused on acquisition and development of oil reserves in the Caspian Sea region. In July 2007, the company already announced the extension of exchange offer by its BVI subsidiary, in the amount of 290 million USD.