PARIS & TORONTO--(BUSINESS WIRE)--March 14, 2006--Eramet S.A. (EURONEXT PARIS:ERA) and Weda Bay Minerals Inc. (TSX:WDA - News) announced today that Weda Bay has entered into a support agreement with Eramet pursuant to which Eramet will offer Cdn $2.70 per share in cash for all of the issued and outstanding common shares of Weda Bay. The Eramet offer is fully financed and comes as a result of a process run by the Board of Directors of Weda Bay to explore strategic relationships with industry leaders in order to develop the Halmahera Project in Indonesia and enhance shareholder value.
The Eramet offer is in line with Eramet's strategy of expanding its nickel activity on a competitive basis. Development of the Halmahera Project offers the potential for significant nickel production to serve the growing Asian market on a long-term basis. In deciding to pursue this transaction, Eramet also considered Indonesia's improving business environment as well as local support for the project.
The Board of Directors of Weda Bay has, upon the recommendation of a special committee of its directors, unanimously approved the all cash offer of Eramet and the support agreement, and has agreed to recommend that shareholders accept the offer. Each of the directors and officers of Weda Bay has agreed to tender his shares to the offer. Weda Bay's financial advisor, RBC Capital Markets, has advised the Board of Directors that the consideration being offered under the Eramet offer is fair from a financial point of view to Weda Bay shareholders. Mailing to Weda Bay shareholders of the terms of the offer by way of a take-over bid circular, the Weda Bay directors' circular, and related documents in connection with the offer is expected to occur in the next two weeks. Unless extended, the offer will be open for acceptance for a period of 35 days following the date of mailing.
Certain large institutional shareholders of Weda Bay representing over 40 percent of the fully diluted shares outstanding, including Millennium Partners L.P., have agreed, under certain circumstances, to tender to the Eramet offer.
"We believe that the Eramet offer provides Weda Bay shareholders with an attractive opportunity to achieve fair value for their shares," said Weda Bay's President and Chief Executive Officer, Patrick Evans.
"The offer by Eramet provides Weda Bay shareholders with a premium for their investment, payable in cash," said Jacques Bacardats, President and Chief Executive Officer of Eramet. Mr. Bacardats added, "Eramet will fund the offer using existing cash reserves and credit facilities."
The benefits of the Eramet offer for Weda Bay shareholders include:
- a 170 percent premium over the Cdn $1.00 reference price at which Weda Bay recently raised approximately Cdn $17.6 million in a private placement;
- a 37 percent premium over the three month volume weighted average trading price of Weda Bay; and
- 100 percent cash consideration and low transaction execution risk.
The Eramet offer is subject to customary conditions including the acceptance by holders of at least 75 percent of Weda Bay's common shares and the receipt of necessary regulatory approvals.
The support agreement also provides for the payment of a break fee of Cdn $10 million to Eramet by Weda Bay under certain circumstances.
Eramet is being advised by Merrill Lynch & Co. and Lette, Whittaker. Weda Bay is being advised by RBC Capital Markets and Fasken Martineau.
Note: Certain information contained in this press release is forward looking and is subject to unknown risk or uncertainties. Actual results, performance or achievements may differ materially from the anticipated results, performance or achievements or results implied by such forward-looking information.
Weda Bay Minerals is an exploration and development company that controls the Halmahera Nickel Cobalt Project at Weda Bay, Halmahera in Eastern Indonesia. Halmahera is one of the largest undeveloped nickel projects globally.
Eramet is an integrated mining and metallurgy group that produces non-ferrous metals and their chemical derivatives, high-performance special steels, nickel alloys and superalloys and high-performance parts for industry. With its historical roots in nickel mines, which it has been operating for over a century in New Caledonia, Eramet actively pursues a policy of growing and broadening its business base. Focusing on the development of high value-added materials, the Group has global positions in all three of its lines of business: high-performance alloys & special steels, manganese and nickel.
Manager: Investor Relations:
Philippe Joly, +33-1-45384202
Weda Bay Minerals Inc.
President and CEO:
Patrick Evans, 416-670-5114