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DNO International decided not to proceed with its proposed all-cash offer to acquire Calvalley.
DNO previously announced July 5 its intention to commence the offer on or about July 12 by way of publication of an advertisement and filing of a formal take-over bid circular. At that time, DNO had not received any meaningful engagement from Calvalley's board of directors or senior management to its approaches, including an offer letter dated June 7. Therefore, the company felt compelled to bring instead its offer directly to the Calvalley shareholders.
Following DNO announcement, Calvalley in turn disclosed on July 6 that it had received from one of its partners a notice of material terms and conditions that set forth the provisions under which such partner intends to dispose of its 25% working interest in Block 9, Republic of Yemen, to a third party. Calvalley further disclosed that under Block 9's joint operating agreement, the existing partners have the option to match the offer and acquire either all or their proportionate share of the working interest to be assigned and that the Calvalley board of directors would meet immediately to consider its options.
The opportunity by Calvalley to match the offer on Block 9 may help explain Calvalley's previous reluctance to enter into any meaningful dialogue.
DNO International looks forward to learning Calvalley's response to the notice before determining whether or how best to engage in a constructive dialogue towards any transaction.