Royal Helium Ltd. entered into an agreement to acquire Imperial Helium Corp. from Management, insiders and directors of Imperial and others for CAD 23.4 million.
At closing, the board of directors of Royal will be increased to include one additional member from Imperial's board of directors and will be led by Royal's current Chairman, Andrew Davidson. Further, incumbent senior officers, management and employees of Royal shall be retaining their current positions after closing. Samuel Kyler Hardy or such other current director of the Imperial Board as acceptable to Royal shall be appointed as a director of Royal effective upon implementation of the Arrangement. Upon implementation of the Arrangement, each of the directors of the Imperial Board shall agree to resign as directors of Imperial. As of June 20, 2022, David Johnson has stepped down from Imperial Helium's Board of Directors effective immediately but will continue to serve as Imperial's President and Chief Executive Officer until closing of the transaction.
Completion of the Arrangement is subject to a number of conditions being satisfied or waived by one or both of Royal and Imperial at or prior to closing of the Arrangement, including approval of the at least two third of Imperial Shareholders, together with any requisite minority approvals, the receipt of all necessary regulatory and Court approvals and the satisfaction of certain other closing conditions customary for a transaction of this nature. Management, insiders and directors of Imperial holding approximately 16% of the outstanding Imperial Shares on a diluted basis including outstanding performance shares have entered into support agreements under which they have agreed, among other things, to vote in favor of the Arrangement. The Arrangement Agreement has been approved by the board of directors of Royal and Imperial, and the board of directors of Imperial recommends that the Imperial Shareholders vote in favor of the Arrangement. It is expected that the special meeting of Imperial Shareholders (the "Meeting") to approve the proposed Arrangement will be held in the second half of June 2022 and, if approved at the Meeting, it is expected that the Arrangement would close shortly thereafter. It is expected that the special meeting of the shareholders of Imperial to approve the Arrangement will be held on July 12, 2022 and, if approved, it is expected that the Arrangement will close shortly thereafter. As of July 12, 2022, Shareholders of Imperial Helium Corp. approved the transaction. As of June 20, 2022, the transaction is expected to close no later than July 31, 2022. As of July 12, 2022, Imperial intends to seek a final order of the British Columbia Supreme Court to approve the Arrangement at a hearing expected to be held on July 15, 2022.
As of July 15, 2022, Imperial Helium Corp. has been granted the final court order from the Supreme Court of British Columbia approving the plan of arrangement. Assuming timely receipt of court approval and the satisfaction of all other closing conditions, closing of the Arrangement is expected to occur on or about July 22, 2022.
Haywood Securities Inc. has provided the board of directors of Imperial with an opinion to the effect that, as of the date of the Arrangement Agreement, the consideration to be received by the Imperial Shareholders under the Arrangement is fair, from a financial point of view, to such Imperial Shareholders. Cormark Securities Inc. is acting as the exclusive financial advisor to Royal with respect to the Arrangement. Brent Kraus of Bennett Jones LLP is acting as Royal's legal advisor. Eight Capital is acting as financial advisor to Imperial. Michael Waters and Breanne Lehodey of Borden Ladner Gervais LLP is acting as Imperial's legal advisor. Computershare Trust Company of Canada acted as depositary to Imperial Helium Corp. and Royal Helium Ltd. Odyssey Trust Company served as transfer agent to Imperial Helium.