Armada Oil Inc. (OTCBB: AOIL) and Mesa Energy Holdings Inc. (OTCBB: MSEH) announced that they have entered into a non-binding letter of intent to pursue a business combination. The closing of the business combination is subject to further due diligence, negotiation and execution of definitive agreements, as well as necessary consents and approvals. The board of directors of both Armada Oil and Mesa Energy have unanimously approved the key terms of the proposed transaction and have authorized their respective management to pursue the transaction.
The non-binding letter of intent provides that Armada Oil would issue 0.325 shares of its common stock to the shareholders of Mesa Energy in exchange for each Mesa Energy common share, representing an approximately 134% premium to Mesa Energy’s most recent close of $0.168 on Oct. 3, 2012. The proposed transaction would result in the current holders of equity securities of Mesa Energy owning approximately 57% of the combined company common stock, and the equity holders of Armada Oil owning approximately 43% of the combined company common stock. The surviving entity will retain the name of Armada Oil Inc. and will be headquartered in Dallas.
C. K. Cooper & Co. is serving as financial advisor on the transaction. It is the goal of both Armada Oil and Mesa Energy to close this anticipated transaction by the end of this year.
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