On May 1, the boards of Trin­i­ty Ex­plo­ration and Pro­duc­tion and Touch­stone Ex­plo­ration an­nounced that they had reached agree­ment for Touch­stone to ac­quire all of Trin­i­ty’s shares.

In the agree­ment, Touch­stone, which is head­quar­tered in Cal­gary, would ac­quire 100 per cent of Trin­i­ty, a com­pa­ny whose par­ent is based in the Unit­ed King­dom, re­sult­ing in one small, in­de­pen­dent oil com­pa­ny op­er­at­ing in T&T ac­quir­ing an­oth­er sim­i­lar com­pa­ny.

But on Ju­ly 17, the Trin­i­ty board re­ceived an un­so­licit­ed, con­di­tion­al, non-bind­ing, in­dica­tive pro­pos­al from Lease Op­er­a­tors, a pri­vate com­pa­ny in­cor­po­rat­ed in T&T and owned by the Brash fam­i­ly and run by Charles Brash and his son An­tho­ny.

The Lease Op­er­a­tors pro­pos­al, which is for all of Trin­i­ty’s shares, is a cash of­fer, with the price of 68.05 pence per Trin­i­ty share. That val­ued the oil com­pa­ny at £26.5 mil­lion (about US$34.18 mil­lion) on Wednes­day, when Trin­i­ty an­nounced the in­ter­est of the T&T com­pa­ny.

The Touch­stone of­fer for Trin­i­ty is an all-share of­fer. The agree­ment was to be ef­fect­ed by a court-sanc­tioned scheme of arrange­ment and was to be ex­e­cut­ed by Trin­i­ty share­hold­ers re­ceiv­ing 1.5 new Touch­stone shares for each Trin­i­ty share held.

In the news re­lease on May 1 an­nounc­ing the ac­qui­si­tion, Touch­stone said: “Un­der the terms of the ac­qui­si­tion, Trin­i­ty share­hold­ers will, in ag­gre­gate, re­ceive ap­prox­i­mate­ly 58,341,102 new Touch­stone shares. Im­me­di­ate­ly fol­low­ing com­ple­tion of the ac­qui­si­tion, Trin­i­ty share­hold­ers will own ap­prox­i­mate­ly 19.9 per cent. of the share cap­i­tal of the com­bined group (based on the ex­ist­ing is­sued com­mon share cap­i­tal of Touch­stone and the ful­ly di­lut­ed or­di­nary share cap­i­tal of Trin­i­ty as at April 30, 2024.”

Touch­stone al­so dis­closed in the news re­lease an­nounc­ing the agree­ment be­tween the boards that the ac­qui­si­tion rep­re­sents an im­plied val­ue for Trin­i­ty of ap­prox­i­mate­ly US$30.1 mil­lion, based on the clos­ing Touch­stone share price as of April 30, 2024, the day be­fore the trans­ac­tion was an­nounced.

In the last week of June, Trin­i­ty an­nounced that all the share­hold­er, reg­u­la­to­ry and an­ti-trust con­di­tions—the sale of 100 per cent of Trin­i­ty re­quired the ap­proval of T&T’s Fair Trad­ing Com­mis­sion—had been re­ceived.

The shares of Trin­i­ty and Touch­stone both trade on the Al­ter­na­tive In­vest­ment Mar­ket (AIM), which is a sub-seg­ment of the Lon­don Stock Ex­change (LSE).

In its fil­ing on Wednes­day, Trin­i­ty said the Lease Op­er­a­tors of­fer of £26.5 mil­lion rep­re­sents a pre­mi­um of:

• 41.8 per cent to the clos­ing price of a Trin­i­ty share of 48 pence on 24 Ju­ly 2024 (be­ing the date of this an­nounce­ment);

• 89.0 per cent to the un­af­fect­ed price of a Trin­i­ty share of 36 pence (be­ing the clos­ing price on April 30, 2024, the last busi­ness day pri­or to the an­nounce­ment of the ac­qui­si­tion);

• 71.0 per cent to the vol­ume-weight­ed av­er­age price of a Trin­i­ty share of 39.8 pence for the three-month pe­ri­od end­ing April 30, 2024 (be­ing the last busi­ness day pri­or to the an­nounce­ment of the ac­qui­si­tion); and

• 39.6 per cent. to the im­plied val­ue of a Trin­i­ty share pur­suant to the ac­qui­si­tion based on the clos­ing price of a Touch­stone share of 32.5 pence on Ju­ly 24, 2024 (be­ing date of this an­nounce­ment).

Ac­cord­ing to the Trin­i­ty fil­ing, the Lease Op­er­a­tors pro­pos­al states that the mak­ing of a bind­ing of­fer is con­di­tion­al up­on, among oth­er things, the com­ple­tion of sat­is­fac­to­ry con­fir­ma­to­ry due dili­gence on Trin­i­ty by Lease Op­er­a­tors and a unan­i­mous rec­om­men­da­tion from the board.

“Lease Op­er­a­tors has in­formed the (Trin­i­ty) board that the pre-con­di­tion re­lat­ing to its rec­om­men­da­tion is not waiv­able but the pre-con­di­tion re­lat­ing to due dili­gence is waiv­able,” ac­cord­ing to Trin­i­ty’s fil­ing on Wednes­day.

Con­tact­ed for com­ment on Fri­day, Lease Op­er­a­tors CEO, An­tho­ny Brash, said he could not dis­cuss any mat­ters con­cern­ing the project.

The Brash fam­i­ly al­so owns Well Ser­vices Pe­tro­le­um Com­pa­ny Ltd, which was orig­i­nal­ly in­cor­po­rat­ed as Well Ser­vices Ltd in 1967.

Well Ser­vices has per­formed drilling ser­vices for every oil com­pa­ny that has op­er­at­ed in Trinidad, com­menc­ing with Tex­a­co Trinidad and con­tin­u­ing with Trinidad-Tesoro, Shell Trinidad, Trin­toc, Trin­topec, Amo­co/BP, Petrotrin, Trin­mar, Rep­sol, and all in­de­pen­dent lease and far­mout op­er­a­tors.

Guardian Me­dia con­tact­ed Touch­stone CEO and pres­i­dent Paul Baay for com­ment in Cal­gary on Fri­day and asked him if the com­pa­ny was pre­pared to im­prove its all-stock of­fer for Trin­i­ty.

Baay said, “At this stage, Touch­stone’s of­fer re­mains the on­ly of­fer on the ta­ble – the Lease Op­er­a­tors pro­pos­al is in­dica­tive, con­di­tion­al and non-bind­ing.

“Touch­stone’s of­fer has al­ready been ac­cept­ed by share­hold­ers and ap­proved by all of the reg­u­la­tors in Trinidad.

“Our of­fer would have com­plet­ed next week if not for the Trin­i­ty board giv­ing Lease Op­er­a­tors more time. The court hear­ing to sanc­tion Touch­stone’s of­fer is now on 23 Au­gust.

“Touch­stone re­serves the right to in­voke a con­di­tion to its of­fer which re­quires the court sanc­tion hear­ing to have been held by 22 Au­gust, should it so choose.

“No fur­ther ac­tions have been tak­en by Touch­stone at this stage as a re­sult of the above, and a fur­ther an­nounce­ment will be made as ap­pro­pri­ate in due course.”

In com­ments on Fri­day, CEO of Trin­i­ty, Je­re­my Bridglals­ingh, said the board of the com­pa­ny has gone through the process of re­ceiv­ing ap­provals from reg­u­la­tors in T&T and in Lon­don, where the com­pa­ny is list­ed.

“Our share­hold­ers, dur­ing that process, clear­ly in­di­cat­ed that if there was a cash bid, they would like to at least view and un­der­stand it, and po­ten­tial­ly that would be a pre­ferred route,” said the oil ex­ec­u­tive.

He said the pri­ma­ry du­ty of a board un­der the Unit­ed King­dom’s Com­pa­nies Act is its fidu­cia­ry du­ty to share­hold­ers.