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Press release from CNW Group

Second Wave Petroleum Inc. Announces Definitive Agreement for Going Private Transaction

Wednesday, May 29, 2013

Second Wave Petroleum Inc. Announces Definitive Agreement for Going Private Transaction

13:46 EDT Wednesday, May 29, 2013

Toronto Stock Exchange: SCS
Common Shares: 84,121,297

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

CALGARY, May 29, 2013 /CNW/ - Second Wave Petroleum Inc. (TSX:SCS) ("Second Wave" or the "Company") announces that it has entered into a definitive agreement (the "Arrangement Agreement") with Brookfield Bridge Lending Fund Inc. ("Brookfield"), the Company's controlling shareholder, to effect the previously-announced going private transaction at a cash price of $0.30 per share.

The Arrangement Agreement provides for the purchase by Brookfield, through a wholly-owned subsidiary, of all of the outstanding common shares of the Company held by shareholders other than Brookfield and its affiliates (the "Public Shareholders") for cash consideration of $0.30 per share.  The transaction is to be completed by way of plan of arrangement under the Business Corporations Act (Alberta) (the "Arrangement") and is subject to requisite security holder, court and regulatory approvals and other closing conditions as provided for in the Arrangement Agreement.

The offer price of $0.30 per share represents a premium of approximately 131% over the closing price of the common shares on the Toronto Stock Exchange ("TSX") on May 3, 2013, the last trading day prior to the date that Brookfield's non-binding proposal in respect of the transaction was publicly announced, and a premium of approximately 105% over the volume-weighted average trading price of the common shares on the TSX for the twenty (20) trading days then ended.

The consideration offered by Brookfield is above the fair market value range of the common shares as determined by an independent, formal valuation obtained by Second Wave in accordance with applicable securities laws.  The formal valuation was prepared by Peters & Co. Limited ("Peters & Co.") at the request of a special committee of independent directors of Second Wave, unrelated to Brookfield (the "Special Committee"), and determined that, as of May 29, 2013 and subject to the assumptions, limitations and qualifications set forth therein, the fair market value range of the common shares is between $0.06 and $0.23 per share.  The selection of Peters & Co. as independent valuator, and the assessment of its qualifications and independence, was made by, and the valuation was prepared under the supervision of, the Special Committee.  Peters & Co. also provided the Special Committee with an opinion that, as of May 29, 2013 and subject to the assumptions, limitations and qualifications set forth therein, the cash consideration of $0.30 per share payable to Public Shareholders pursuant to the Arrangement is fair, from a financial point of view, to the Public Shareholders.

Having thoroughly reviewed and carefully considered the financial and other aspects of the Arrangement and other relevant matters, the Special Committee has unanimously determined, and the board of directors of the Company (the "Board of Directors") (with the director representatives of Brookfield abstaining) unanimously agrees, that the Arrangement is in the best interests of Second Wave and that the cash consideration payable to the Public Shareholders pursuant to the Arrangement is fair to the Public Shareholders.

The Company's shareholders and option holders will be asked to vote on the Arrangement at an annual and special meeting proposed to be held on June 27, 2013, and the Board of Directors (with the director representatives of Brookfield abstaining) unanimously recommends that Public Shareholders and option holders vote in favour of the Arrangement.  Completion of the Arrangement will require approval by not less than two-thirds of the votes cast by shareholders only, by not less than two-thirds of the votes cast by shareholders and option holders together, voting as a single class, and by a simple majority of votes cast by disinterested shareholders other than Brookfield, its affiliates and joint actors and other interested persons pursuant to the minority approval requirements of applicable securities laws.  Subject to approval of the Arrangement by the requisite security holder votes at the June 27, 2013 meeting and thereafter by the Court of Queen's Bench of Alberta, and to satisfaction or waiver of other conditions specified in the Arrangement Agreement, the transaction is expected to close on or about June 28, 2013.

The Arrangement Agreement provides for, among other things, certain non-solicitation covenants on the part of Second Wave with respect to alternative transactions, subject to the Company being able to consider and accept a qualifying superior proposal within the meaning of the Arrangement Agreement and Brookfield's right to match any such superior proposal.  Second Wave has agreed to pay Brookfield a fee of $4.0 million if the Arrangement Agreement is terminated in certain circumstances, including if Second Wave enters into an agreement with respect to a qualifying superior proposal or the Board of Directors withdraws its recommendation in respect of the Arrangement.

All of the directors and executive officers of Second Wave, other than the director representatives of Brookfield, together holding approximately 1.6% of the outstanding Common Shares (on a non-diluted basis) and approximately 73.9% of the outstanding options to purchase Common Shares, have entered into voting agreements with Brookfield pursuant to which they have agreed, among other things, to vote in favour of the Arrangement.

An information circular containing more detailed information regarding the Arrangement, including copies of the Arrangement Agreement and the valuation and fairness opinion of Peters & Co., is expected to be filed on SEDAR on May 31, 2013 and thereafter mailed to Second Wave security holders.

READER ADVISORIES

Forward-Looking Statements. This news release contains forward-looking statements as to the Company's internal projections, expectations and beliefs relating to future events or circumstances. Forward-looking statements are typically (but not necessarily) identified by words such as "anticipate", "believe", "budget", "estimate", "expect", "plan", "intend", "potential", "may", "will", "should" or similar words suggesting future outcomes. Although the Company believes that these forward-looking statements are reasonable, undue reliance should not be placed on them as they are subject to known and unknown risks and uncertainties, many of which are beyond the Company's control. Forward-looking statements are not guarantees of future outcomes. There can be no assurance that the plans, intentions or expectations contained in the forward-looking statements or upon which they are based will in fact occur or be realized, and actual results may differ from those expressed or implied in the forward-looking statements. The difference may be material.

Specific forward-looking statements contained in this news release include statements regarding: the timing of the annual and  special meeting of Second Wave security holders to consider the Arrangement; the filing and sending of an information circular containing more detailed information regarding the Arrangement; receipt of requisite security holder, regulatory and court approvals in respect of the Arrangement; and completion of the Arrangement.  In making such forward-looking statements, Second Wave has made various assumptions regarding, among other things: the grant an interim order by the Court of Queen's Bench of Alberta directing the calling of a security holder meeting pursuant to section 193(4) of the Business Corporations Act (Alberta); the time required to prepare and mail the information circular and other proxy materials for the annual and special meeting of Second Wave security holders; the ability of the parties to obtain, in a timely manner and on satisfactory terms, all necessary security holder, regulatory and court approvals, including under the Competition Act (Canada); and the ability of the parties to satisfy, in a timely manner, all other conditions precedent to closing of the Arrangement.  The future dates forecast in this news release may change in the event of unforeseen delays in respect of any of these matters.

Inherent risks and uncertainties relating to the Arrangement include the failure to obtain all requisite security holder, regulatory and court approvals, or to otherwise satisfy all conditions precedent to closing of the Arrangement, in a timely manner or at all, which may result in the Arrangement not being completed on the agreed terms or at all.  In addition, breach by Second Wave of its obligations under the Arrangement Agreement may result in the Company being required to pay a termination fee.

The forward-looking statements included herein are made as of the date of this news release and Second Wave undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by securities laws.

SOURCE: Second Wave Petroleum Inc.

For further information:

Colin B. Witwer, President and CEO
Telephone: (403) 451-0165
Email: info@secondwavepetroleum.com
Web: www.secondwavepetroleum.com

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