Canada’s Petrobank Energy and Resources Ltd. has extended thedeadline of its initial offer to purchase all shares of Ranger OilLtd.’s common stock for another two weeks. Petrobank also hasentered a binding deal with Alberta Energy Co. to sell certainnatural gas assets currently held by Ranger for $262 million if thehostile takeover bid succeeds.

Petrobank estimates the assets to be sold only equal about 10%of Ranger’s total production on a barrel of oil equivalent basis.The hostile takeover strategy was first offered on April 6, one dayafter Ranger put itself on the market due to concern over sharevalues by shareholders. The first deadline of May 12 was extendedto June 5, and now the offer has been extended to June 19. Eachshare of Ranger stock would receive C $7.50 to a maximum of C $330million, or three common shares of Petrobank per Ranger share.

The offer is conditioned on: (1) Petrobank being able to acquire66 2/3% of the outstanding Ranger shares pursuant to the offer; (2)nominees of Petrobank constituting a majority of the directors ofRanger; (3) and Ranger allowing Petrobank access to allconfidential operating data without restrictions. The release ofthe confidential data is a major sticking point because Ranger hasbeen showing the data to other suitors who have agreed to its termssince at least April 17 , but Petrobank has only been offeredaccess recently and not on its own terms.

Ranger’s board of directors recommended its shareholders rejectthe offer, due largely to the per share terms. “Petrobank’s offerfalls far short of capturing the true value of Ranger’s assets andopportunities and is not in the interests of Ranger’s shareholders.We believe that Ranger shareholders will be much better served bythe process of maximizing shareholder value which is currentlyunderway and moving forward on schedule,” Fred Dyment, president ofRanger Oil said in a previous statement.

Petrobank is currently reviewing and examining its alternativesfor improvements of the terms and conditions of the offer that ison the table. It expects to be at a point within the near future toannounce its findings.

Alex Steis

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