Q. Should I accept the Total Offer?
A. NO. The Savanna Board, on recommendation of the Special Committee, has unanimously determined that the Total Offer significantly undervalues the Common Shares and is not in the best interests of Savanna or the Shareholders.
The Savanna Board UNANIMOUSLY recommends that Shareholders REJECT the Total Offer and NOT TENDER their Common Shares. Members of the Savanna Board and executive officers do NOT intend to tender their Common Shares to the Total Offer, which the Savanna Board views as offering insufficient consideration to Shareholders.
Q. How do I reject the Total Offer?
A. You do not need to do anything. DO NOT tender your Common Shares. If you are contacted by Total or its information or solicitation agent, DO NOT TENDER your Common Shares or complete any documents that Total may provide you.
Q. Can I withdraw my Common Shares if I have already tendered?
A. YES. You can withdraw your Common Shares. For information on how to withdraw your Common Shares, Savanna recommends you contact your broker or D.F. King, the Information Agent retained by Savanna, at the phone numbers listed at the end of this Q&A.
Q. Why does the Board believe that the Total Offer should be rejected?
A. The Savanna Board, on recommendation of the Special Committee, has unanimously determined that the Total Offer significantly undervalues the Common Shares and is not in the best interests of Savanna or the Shareholders. The Savanna Board took into account numerous factors including, but not limited to, the reasons set out in the Directors’ Circular and in the Reasons section of this website, in reaching its UNANIMOUS recommendation that Shareholders REJECT the Total Offer and NOT TENDER their Common Shares to the Total Offer:
· The Total Offer does not provide a control premium for Shareholders.
· The Total Offer is highly opportunistic and timed to deprive Shareholders of both significant positive recent market changes and value increasing actions achieved to date which had not yet been reflected in the share price.
· The Total Offer substantially undervalues the contribution that Savanna’s assets would bring to a combined entity and provides inadequate value to Shareholders.
· Transaction multiples are too low compared to similar transactions.
· Superior offers from third parties or other more attractive alternatives for Shareholders may emerge.
· The Total Offer does not attribute any value to the potential future success of Savanna’s ongoing actions to increase Shareholder value.
· Peters & Co. has delivered a written opinion to the Savanna Board that the consideration offered pursuant to the Total Offer is inadequate, from a financial point of view, to Shareholders.
· If successful, the Total Offer may have an adverse effect on the liquidity of the Common Shares.
· The Total Offer is conditional and does not represent a firm offer.
· The value of the consideration under the Total Offer is uncertain and entirely dependent on the value of the Total Shares in the future.
· Total, an amalgamation of many disparate small businesses, has not emerged as a material player in any particular business line, has never completed an acquisition of Savanna’s size, and is underdeveloped in the highly consequential oilfield operations sector.
· Total has failed to provide adequate disclosure that would reasonably be expected to affect the decision of a Shareholder to accept or reject the Total Offer.
Shareholders are strongly encouraged to carefully review the full explanation of the reasons for the Savanna Board’s recommendation starting on page 8 of the Directors’ Circular or in the “Reasons” section of this website, including the opinion of Peters & Co. dated December 21, 2016 that, as of that date and subject to the assumptions, limitations and qualifications contained therein, the consideration offered pursuant to the Total Offer is inadequate, from a financial point of view, to Shareholders.
Q. What action is the Savanna Board undertaking in response to the Total Offer?
A. Since Total’s announcement of its intention to make an offer for Savanna, Savanna has received strong expressions of interest from third parties in evaluating the opportunity to make a competing offer for Savanna. Under the supervision of the Special Committee, Savanna’s management, with the assistance of its financial and legal advisors, intends to conduct a formal process to explore the full range of strategic alternatives, which may include a merger or partnership with strategic or financial partners, a sale reflecting full and fair value for Shareholders or an acquisition by Savanna, with a view to maximizing value for all Shareholders. Savanna is in the process of establishing a comprehensive data room which will be available to interested parties wishing to transact with Savanna that execute a confidentiality agreement.
The Soft Support Agreements that the Soft Support Shareholders have entered into with Total will not prevent the Soft Support Shareholders from accepting or voting in favour of another transaction. The Soft Support Agreements are “soft” support agreements and can, in accordance with their terms, be terminated in the event of a transaction that has, in the sole opinion of the Soft Support Shareholder, acting reasonably and in accordance with its fiduciary duties, terms more favorable to the Soft Support Shareholder than the Total Offer.
While it is impossible to predict whether any compelling proposals will emerge from these efforts and discussions, the Savanna Board believes that Savanna and its business are potentially very attractive to other parties in addition to Total.
Q. My broker advised me to tender my Common Shares. Should I?
A. NO. The Savanna Board, upon recommendation of the Special Committee, has UNANIMOUSLY recommended that Shareholders REJECT the Total Offer and NOT TENDER their Common Shares to the Total Offer. The Total Circular states that Total is paying brokers a fee for soliciting tenders to the Total Offer, so their advice with respect to a decision to tender may not be impartial.
Q. Is this a “hostile” take-over bid?
A. YES. In a friendly take-over, the two companies work together to come to an agreement that would enhance shareholder value. Total, however, initiated its offer without the support of Savanna after advising Savanna’s management it would not move forward with such an offer without the full support of management and the Board and after failing to provide Savanna with any offer. Given this, the Total Offer should be considered a hostile offer. The Special Committee and Savanna Board is working, together with Savanna’s external financial and legal advisors, to develop, review and evaluate a range of strategic alternatives in the best interests of Savanna and with a view to maximizing value to Shareholders.
Q. Will Total increase the Total Offer?
A. Savanna does not know if Total will increase the Total Offer. However, given the significant accretion to Total based on the existing Total Offer, the Savanna Board believes that Total has the ability to substantially increase its offer as the Total Offer substantially undervalues the Common Shares and is opportunistic.
Q. Will I have protections if Total buys more than 66⅔% of the Common Shares and I don’t sell?
A. YES. In Canada, applicable corporate law contains protections for minority Shareholders, including the right, in certain circumstances, to dissent and demand payment of the fair value of their Common Shares. If Total is successful in acquiring in excess of 90% of the Common Shares pursuant to the Total Offer, Total has disclosed an intention to acquire the remaining Common Shares pursuant to a right of compulsory acquisition pursuant to the ABCA, which process may, however, not be available to Total. If Total is successful in acquiring in excess of 66⅔% of the Common Shares, but less than 90% of the Common Shares or the right of compulsory acquisition is not available, Total has disclosed only that it may pursue other means of acquiring the remaining Common Shares not deposited under the Total Offer pursuant to an amalgamation, statutory arrangement, capital reorganization or other transaction (as determined by Total). You are encouraged to read Section 20 of the Total Circular, “Acquisition of Savanna Common Shares Not Deposited Under the Offer” for an explanation of Total’s intentions and the mechanics of any such acquisition.
Q. Do I have to decide now?
A. NO. You do not have to take any action at this time. The Total Offer is currently scheduled to expire at 11:59 p.m. (Pacific time) on March 24, 2017, and is subject to a number of conditions that have yet to be satisfied and may never be satisfied. You do not have to take any action until close to the expiry date of the Total Offer to ensure that you are able to consider all of the options available to you.
If you have already tendered your Common Shares to the Total Offer and you decide to withdraw these Common Shares from the Total Offer, you must allow sufficient time to complete the withdrawal process prior to the expiry of the Total Offer. For more information on how to withdraw your Common Shares, you should contact your broker or D.F. King, the Information Agent retained by Savanna, at the numbers listed below.
Q. Who do I ask if I have more questions?
A. The Savanna Board recommends that you read the information contained in this Directors’ Circular carefully. You should contact D.F. King, the Information Agent retained by Savanna, with any questions or requests for assistance that you may have.
D.F. King Canada Ltd.
North American Toll Free Phone:
Outside North America, Banks and Brokers Call Collect: 1-201-806-7301