Bow Valley rejects plan to purchase Getty shares

All deals are off, Calgary-based Bow Valley Industries says of its plans to buy a stake in Getty Resources.

Earlier this month Bow Valley entered into share option agreements with four shareholders of Getty to buy 2,217,529 shares at $14.09 per share. The share options were exercisable to Oct 24.

Two of the selling shareholders were Getty directors, and one of those two was the president and chief executive officer, R.C. Atkinson.

A few days after the share option agreements were announced, it was reported Getty had agreed to purchase the mining interests of Bow Valley and that Bow Valley would buy a million shares and warrants of Getty.

No reason has been given by Bow Valley for calling off the deals.

If the share options had been exercised, Bow Valley would have owned about 24% of Getty’s common shares, or 15.2% on a fully diluted basis. Total cost to Bow Valley for the options would have been $31.2 million. Regulatory approval would have been required; the tse would have had to approve transfer of the portion of those shares which are subject to escrow arrangements.

Bow Valley is currently the target of a takeover bid by British Gas PLC; a revised offer by the British utility would see it acquire 51% of Bow Valley by purchasing treasury shares and those of shareholders. Bow Valley is a natural resource company involved in the exploration and development of oil, gas, coal, gold and uranium in Canada, the U.S. and other parts of the world.

Getty is involved in what may be the largest undeveloped gold deposit in Canada, the Tundra project in the Northwest Territories. Getty (49%) and its partner, Noranda Exploration (51%), are proposing a $25-million underground exploration program for the project, located 130 miles northeast of Yellowknife at Courageous Lake. Drilling at the site has delineated a wide zon e hosting multiple mineralized zones, striking for 4,300 ft and extending downwards to 3,500 ft with widths exceeding 30 ft.