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Wolfden enters exclusivity deal for takeover by Zinifex


2007-02-19 09:19 ET - News Release

Mr. Ewan Downie reports

WOLFDEN RESOURCES INC. RECEIVED A NON BINDING LETTER OF INTEREST FROM ZINIFEX LIMITED AND ENTERS INTO EXCLUSIVITY AGREEMENT

Wolfden Resources Inc. has entered into a letter agreement with Zinifex Ltd. whereby Wolfden has granted to Zinifex an exclusivity period in which to complete due diligence, and has agreed not to solicit other proposals subject to the exercise by the Wolfden board of directors of its fiduciary duties. Wolfden agreed to grant such exclusivity period upon having received an expression of interest from Zinifex in the form of a non-binding and conditional proposal for the acquisition of all of the outstanding common shares of Wolfden, for a cash price of $3.90 per share (including shares issued or issuable upon the exercise of Wolfden warrants and stock options).

Wolfden has agreed not to solicit proposals relating to any acquisition of its common shares or similar transactions from other persons or entities until after March 7, 2007. This exclusivity period may be extended, in certain circumstances, to March 16, 2007. The letter agreement provides that the board of Wolfden may respond to an unsolicited proposal from another party where it has a fiduciary duty to do so and that Wolfden will provide Zinifex with the particulars of any such proposal. Wolfden has agreed to reimburse Zinifex's expenses, up to $1-million, if Wolfden enters into a definitive agreement providing for an alternative transaction in certain circumstances.

The letter of interest contemplates a potential transaction in the form of a takeover bid, unless an alternative form of transaction is deemed advisable. The proposal in the letter of interest is conditional upon satisfactory due diligence, the negotiation of transaction documents, and the approval of Zinifex's board of directors of any such transaction documentation. The proposal in the letter of interest is conditional upon the parties entering into a support agreement to include among others the following terms and conditions:


the unanimous favourable recommendation of the board of Wolfden;
a break fee provision in the amount of 3 per cent of the fully diluted value to be offered by Zinifex;
directors and senior officers of Wolfden as well as certain third parties entering into lock-up agreements;
the chief executive officer, the chief operating officer and other as-yet-unspecified officers of Wolfden entering into employment agreements with Zinifex;
no material adverse change; and
notification by Wolfden to Zinifex of the receipt of alternative proposals from third parties and the right of Zinifex to match any such proposal.

Wolfden has engaged BMO Capital Markets as its financial adviser and Stikeman Elliott LLP as its legal adviser. A special committee of the Wolfden board of directors will be considering the proposal described above.

No definitive agreements have been reached, other than the exclusivity letter agreement. There can be no assurances that any transaction will result, or as to the terms thereof.


source: http://new.stockwatch.com/swnet/newsit/newsit_newsit.aspx?bid=B-650735-C:WLF&symbol=WLF&news_region=C