HTE Cash Offer By KNOC

admin — Thu, 22 Oct 2009 17:53:39 +0000

Harvest announced that it has entered into an agreement with Korea
National Oil Corporation (KNOC) for $10.00 cash per unit, representing a
37% premium to Harvest’s closing price on October 21 and a 47% premium
to the units’ 30-day weighted average trading price.
Harvest’s board has unanimously approved the transaction and intends to
vote its respective units (7.0MM units, ~3.9% of Harvest units outstanding)
in favor of the transaction. A transaction information circular is expected to
be mailed in November, with closing planned prior to year-end.
Based on flowing barrel metrics of $55,000-$60,000/Boed (implied in recent
transactions and reasonable for Harvest’s assets), KNOC’s bid ascribes
$0.9B-$1.2B to the trust’s downstream operations (which were acquired in
2006 for $1.6B). Accordingly, we believe that KNOC is paying fair value.
We do not expect a competing offer and based on precedent transactions
involving foreign acquirors, we do not envision that requisite regulatory
approvals will be withheld.

TSX Commentary » Harvest Energy Trust

HTE Cash Offer By KNOC