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From: m4e (Rep: 139)Date: 05/31/2017 19:39
Forum: Teekay Corp - Msg #222Thread #673930323 (Rec: 0)
No movement in the stock but merger news (I don't have a position):
May 31, 2017
HAMILTON, BERMUDA–(Marketwired – May 31, 2017) –

• Share-for-share merger agreement signed with Tanker Investments Ltd., which owns 18 mid-size conventional tankers:
– Creates the world’s largest publicly-listed mid-sized conventional tanker company
– Acquisition of over $500 million of modern tankers, resulting in combined total assets of $2.4 billion(1)
– Expected to be immediately accretive to earnings per share
– Reduces financial leverage and increases total pro forma liquidity by approximately $117 million(2)
– Lowers the average age of fleet by one year
• Teekay Tankers separately acquired the remaining 50 percent interest in Teekay Corporation’s commercial and technical management operations (Teekay Operations) for approximately $27 million, consolidating all commercial and technical management operations under Teekay Tankers.
Teekay Tankers Ltd. (Teekay Tankers or the Company) (NYSE:TNK) today announced that it has agreed to acquire all the remaining issued and outstanding shares of Tanker Investments Ltd. (TIL) (OSLO:TIL), in a share-for-share merger at an exchange ratio of 3.30 Teekay Tankers Class A common shares for each TIL common share (Teekay Tankers currently owns 3.4 million common shares, or 11.3 percent, of TIL). TIL’s fleet consists of 10 Suezmax tankers, 6 Aframax tankers and 2 LR2 Product tankers with an average age of 7.3 years. Following the merger, Teekay Tankers’ fleet will consist of 62 conventional tankers, including 3 in-chartered conventional tankers (30 Suezmax tankers, 22 Aframax tankers, 9 LR2 Product tankers and one 50 percent-owned VLCC).

As part of the transaction, Teekay Tankers will assume approximately $350 million of TIL’s long-term debt, which includes two revolving credit facilities and a term loan, and on a pro forma basis as of March 31, 2017, the transaction adds approximately $117 million(1) of liquidity to Teekay Tankers. The transaction is expected to be immediately accretive to Teekay Tankers’ earnings per share and, since Teekay Operations already provides the commercial and technical management of TIL’s vessels, the Company expects a seamless integration of these two homogenous fleets.

“We believe Teekay Tankers presents an even more compelling investment in the mid-size tanker space with a stronger financial foundation, a much larger, younger fleet with which to service our customers globally, and our now fully-integrated tanker operations, positioning our Company as the leading tanker brand in our segment,” commented Kevin Mackay, Teekay Tankers’ President and Chief Executive Officer.

Mr. Mackay continued, “The merger with Tanker Investments is expected to be immediately accretive to earnings per share, further strengthens the Company’s financial position, and better positions Teekay Tankers to take advantage of the next tanker market upturn. Once finalized, the acquisition will lower our average fleet age, reduce our financial leverage and increase our total liquidity position. In addition, with the acquisition of the remaining interest in Teekay Operations, Teekay Tankers has now completed its evolution into a fully-integrated conventional tanker platform with all management and operations now owned and operated solely by Teekay Tankers.”

The TIL merger has been approved by the Board of Directors of both Teekay Tankers and TIL, including approval from a Special Committee of the Board of Directors of TIL made up of independent TIL board members. The transaction is subject to customary closing conditions, approval by TIL shareholders of the merger, and approval by Teekay Tankers’ shareholders of an increase in the authorized number of Teekay Tankers’ Class A common shares, to permit the issuance of Class A common shares as merger consideration. The Company expects to close the merger in the third quarter of 2017.

The acquisition of the remaining 50 percent ownership in Teekay Operations, from Teekay Corporation, for approximately $27 million, has brought all commercial and technical management operations directly under Teekay Tankers. As compensation, Teekay Tankers has issued to Teekay Corporation approximately 13.8 million Class B common shares. Teekay Operations commercially manages an aggregate fleet of approximately 90 vessels and provides technical management for approximately 60 vessels. The Teekay Operations transaction was approved by the Board of Directors and Conflicts Committee of Teekay Tankers.

(1) Pro-forma balance sheet as of March 31, 2017
(2) TIL’s total liquidity as of March 31, 2017.
TIL Fleet Summary

Vessel Class Year Built Time Charter-Out Rates ($ per day) Expiry
Hovden Spirit LR2 2012
Trysil Spirit LR2 2012
Peak Spirit Aframax 2011
Whistler Spirit Aframax 2010
Blackcomb Spirit Aframax 2010
Tarbet Spirit Aframax 2009 $17,000 February 2018
Emerald Spirit Aframax 2009 $17,500 October 2017
Garibaldi Spirit Aframax 2009
Copper Spirit Suezmax 2010
Tahoe Spirit Suezmax 2010 $19,750 April 2018
Tianlong Spirit Suezmax 2009
Jiaolong Spirit Suezmax 2009
Shenlong Spirit Suezmax 2009 $19,750 March 2018
Dilong Spirit Suezmax 2009
Baker Spirit Suezmax 2009
Cascade Spirit Suezmax 2009
Aspen Spirit Suezmax 2009
Vail Spirit Suezmax 2009
Conference Call

The Company plans to host a conference call on Thursday, June 1, 2017 at 9 a.m. (ET) to discuss the proposed merger with Tanker Investments. All shareholders and interested parties are invited to listen to the live conference call by choosing from the following options:

By dialing 1-800-263-0877 or 1-416-640-5944, if outside of North America, and quoting conference ID code 8834699.
By accessing the webcast, which will be available on Teekay Tankers’ website at www.teekaytankers.com (the archive will remain on the website for a period of one year).
A supporting presentation will also be available in advance of the conference call start time at www.teekaytankers.com.

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