On April 12, 2001, Central Asian Industrial Holdings, NV (CAIH), a Netherlands Antilles-based investment holding company which focuses its investment activities on companies operating in Kazakhstan in oil and gas, power generation and telecommunications, announced that it had submitted an unsolicited offer to acquire 18.4 million Class A common shares of Hurricane Hydrocarbons Ltd. (HHL) at a cash price of $10.25 per share. The aggregate value of the transaction is approximately $189 million.
CAIH currently holds approximately 30 per cent of HHL’s outstanding common shares and if the offer is successful, would hold a majority of the outstanding common shares. As the offer is an “insider” bid under applicable Canadian securities laws, the independent committee of HHL has engaged Peters & Co. Limited (Calgary) to prepare the valuation of the HHL common shares.
In response to the CAIH offer, the independent committee of HHL is recommending that the HHL board approve a special dividend of $4 per common share to be distributed to all HHL shareholders through the issuance by HHL of subordinated debentures having a five-year term. CAIH has applied to the securities commissions of Alberta, Ontario and Quebec to cease trade the debentures.
CAIH has engaged BMO Nesbitt Burns Inc. as its financial advisors and Fraser Milner Casgrain LLP as its legal advisors. The FMC team includes Jeff Barnes, Will Fung, Leslie Johnson, Craig Story and Peter Bouzalas, with assistance from J.L. McDougall, Q.C. (litigation). BMO Nesbitt Burns Inc. retained Jon Levin of Fasken Martineau DuMoulin LLP to act on its behalf. The independent committee of HHL has engaged CIBC World Markets Inc. as its financial advisors and J-P. Bisnaire, Tom Smee, Vincent Mercier, James Reid, Mitchell Finkelstein, John Zinn (tax) and Kent Thomson (litigation) of Davies Ward Phillips & Vineberg LLP as its legal advisors.