San Leon Energy and Realm Energy International Corporation have entered into an agreement (the ”Arrangement Agreement”) pursuant to which San Leon will acquire all of the issued and outstanding shares of Realm (the “Acquisition”).

Pursuant to the Acquisition, each Realm shareholder will receive, for each Realm share, at such shareholder’s election: i) C$1.30 in cash; or ii) 3.30 ordinary shares in the capital of San Leon (or the same number of exchangeable shares of an indirect Canadian subsidiary of San Leon exchangeable on a one-for-one basis directly for ordinary shares in the capital of San Leon, subject to adjustment); or iii) a combination thereof; subject to a maximum of C$17.7 million in cash (subject to adjustment) being paid to Realm shareholders in aggregate. The Acquisition will be implemented by means of a Canadian plan of arrangement and result in Realm becoming an indirect subsidiary of San Leon, with closing expected in November 2011.

The terms of the Acquisition value Realm at approximately C$1.30 per share, based on the San Leon volume-weighted average price (“VWAP”) for the 60 trading days prior to and including 25 August 2011 of 25 pence per share and a Canadian Dollar per British Pound exchange rate of 1.603. Up to approximately 481 million newly issued San Leon shares are expected to be issued to Realm shareholders (assuming that such shareholders elect to receive the consideration payable to them fully in new San Leon shares).

The Board of Directors of each of San Leon and Realm have unanimously approved the Acquisition. The Board of Directors of Realm has received the opinion of its financial advisors that the consideration to be received pursuant to the Acquisition is fair, from a financial point of view, to Realm shareholders and has resolved to recommend that Realm shareholders vote in favour of the Acquisition.

The directors and officers of Realm, corporations controlled by them and certain other significant shareholders of Realm, together holding or controlling an aggregate of 40,912,276 Realm shares (being more than 37.7% of the issued Realm shares) have agreed to vote in favour of the Acquisition.

Tags: San Leon Energy