Acquisition of Equal Energy Ltd. by Petroflow Energy Corporation May Not Be in Shareholders’ Best Interests
Robbins Arroyo LLP is investigating the acquisition of Equal Energy Ltd. (NYSE: EQU) by Petroflow Energy Corporation and Petroflow Canada Acquisition Corp. On December 9, 2013, Equal Energy announced the signing of a definitive agreement pursuant to which Petroflow will acquire Equal Energy for $5.43 per share in cash for each share of Equal Energy common stock.
Is the Proposed Merger Best for Petroflow and Its Shareholders?
Robbins Arroyo LLP’s investigation focuses on whether the board of directors at Equal Energy is undertaking a fair process to obtain maximum value and adequately compensate Equal Energy shareholders in the merger. In addition, the Firm is examining whether the proxy statement filed by Equal Energy in connection with the transaction discloses all material information.
As an initial matter, the $5.43 consideration is substantially below the target price of $6.68 set by an analyst at PI Financial Corp. on November 19, 2013. Notably, Equal Energy stock traded above the $5.43 offer price on the December 6, 2013, reaching a high of $5.72. Further, Equal Energy reported better than expected production for the third quarter 2013 third quarter leading Don Klapko, Equal’s President and CEO, to comment, “Our drilling continues to deliver higher than budgeted reserves and production at an attractive cost… [h]aving averaged over 6,700 barrels for the third quarter, we are confident we will exceed our target production of 6,400 boe/d on average for the full year 2013.”
Finally, the directors and officers of Equal Energy agreed to vote a total of 693,065 common shares in favor of the transaction, which represent approximately 1.9% of the Company’s outstanding common shares.
Given these facts, Robbins Arroyo LLP is examining the Equal Energy board of directors’ decision to sell the company to Petroflow now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects, and whether they are seeking to benefit themselves.
Equal Energy shareholders have the option to file a class action lawsuit to ensure the board of directors properly evaluates the proposal to obtain the best possible price for shareholders and the disclosure of material information.
Equal Energy shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.
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