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ARX - TSX) ARC Resources Ltd. ("ARC") announced today that independent proxy advisory firms, including Institutional Shareholder Services Inc. ("ISS") and Glass Lewis & Co. ("Glass Lewis"), have recommended that the holders of ARC common shares ("ARC Shareholders") vote "FOR" the arrangement resolution at the upcoming special meeting (the "Meeting") of ARC Shareholders to be held on July 14, 2026 at 10:00 a.m. (Mountain time). At the Meeting, ARC Shareholders will be asked to approve the previously announced plan of arrangement (the "Arrangement") involving ARC, Shell plc ("Shell"), Shell Canada Limited, a wholly-owned subsidiary of Shell, and the ARC Shareholders.
ISS AND GLASS LEWIS PROXY RECOMMENDATION
ISS and Glass Lewis highlighted several factors in their reports in support of the Arrangement.
ISS stated, "the strategic rationale is sound, and shareholders are being offered blended consideration of cash and stock at a premium. Shareholders are expected to benefit from a combined company that is a more diversified, scaled entity, with increased liquidity, and a stronger financial position".
ISS also noted that based on the advice of a special committee of independent directors, the board of directors of ARC (the "ARC Board") unanimously approved the Arrangement after considering a number of factors, including that:
- The Consideration's (as defined below) premium to the stock's unaffected trading price (as of April 24, 2026, the last trading day prior to the announcement of the Arrangement Agreement (as defined below)) was 27.3 per cent;
- The combined company is expected to benefit from synergies of US$250 million annually;
- The balanced form of Consideration provides immediate liquidity, certainty of value, as well as the opportunity for ARC Shareholders to participate in the upside potential of the combined company; and
- The ARC Board remains able to respond to a superior proposal in certain circumstances.
ARC Shareholders Are Encouraged to Vote Ahead of the Proxy Voting Deadline
ARC Shareholders of record as of June 1, 2026, are encouraged to vote "FOR" the arrangement resolution approving the Arrangement now, and up to the proxy voting deadline of 10:00 a.m. (Mountain time), July 10, 2026.
A management information circular and proxy statement (the "Information Circular") and accompanying materials with respect to the Meeting have been mailed or otherwise made available to ARC Shareholders and can also be accessed online on ARC's website at www.arcresources.com and under ARC's issuer profile on SEDAR+ at www.sedarplus.ca.
ARC Shareholders who have questions about how to vote may contact ARC's proxy solicitation agent Laurel Hill Advisory Group at Toll-Free: 1-877-452-7184 Text Message: 1-416-304-0211 Email: assistance@laurelhill.com.
ARRANGEMENT AGREEMENT
Under the terms of the arrangement agreement among Shell, Shell Canada Limited and ARC dated April 27, 2026 (the "Arrangement Agreement") as amended by the Amending Agreement (as defined below), ARC Shareholders are entitled to receive 0.40247 of an ordinary share of Shell (each whole share, a "Shell Share") and $8.20 in cash in exchange for each ARC Share, representing total consideration of $32.80 per ARC Share (the "Consideration"), based upon the closing price of Shell Shares on the London Stock Exchange and the daily GBP/CAD exchange rate published by the Bank of Canada as of April 24, 2026, the last trading day prior to the announcement of the Arrangement Agreement. The parties entered into an amending agreement on June 6, 2026, to address certain mechanics related to the issuance and delivery of the Consideration to ARC Shareholders (the "Amending Agreement").
The proposed Arrangement is to be completed by way of an arrangement under the Business Corporations Act (Alberta) and, subject to satisfaction of conditions typical for a transaction of this nature, including regulatory approvals, is expected to close in the second half of 2026.
Forward-looking Information and Statements
This news release contains forward-looking statements and forward-looking information (collectively referred to as "forward-looking statements") within the meaning of applicable securities legislation. Words such as "plan", "expect", "intend", "believe", "should", "anticipate", or other similar words, or statements that certain events or conditions "may" or "will" occur are intended to identify forward-looking statements. In particular, this news release contains forward-looking statements with respect to, among other things: the anticipated benefits of the Arrangement including the anticipated advantages of the combined company; the expected timing of closing for the Arrangement; and similar statements.
Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent known and unknown risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of assumptions, risks and uncertainties including, without limitation: the satisfaction of the conditions the Arrangement is subject to; the approval of the Arrangement at the Meeting; Shell's ability to finance the Arrangement; regulatory and government approvals for the Arrangement; the risk that the Arrangement may be varied, accelerated or terminated in certain circumstances; risks relating to the outcome of the Arrangement, including the risks associated with approval at the Meeting; the risk that the conditions to the Arrangement may not be satisfied, or to the extent permitted, waived, including the risk that required regulatory approvals may not be received in a timely manner or at all; and general business, market and economic conditions.
Although ARC believes that the assumptions used in such forward-looking statements and information are reasonable, there can be no assurance that such assumptions will be correct. Accordingly, readers are cautioned that the actual results achieved may vary from the forward-looking information provided herein and that the variations may be material. Readers are also cautioned that the foregoing list of assumptions, risks, and factors is not exhaustive.
Further information regarding the assumptions and risks inherent in the making of forward-looking statements and in respect of the Arrangement can be found in the Information Circular, along with ARC's other public disclosure documents which are available through ARC's website at www.arcresources.comand through the SEDAR+ website atwww.sedarplus.ca.
The forward-looking information included in this news release is expressly qualified in its entirety by the foregoing cautionary statements. These forward-looking statements are made as of the date of this news release, and ARC disclaims any intent or obligation to update publicly any forward-looking information, whether as a result of new information, future events or results, or otherwise, other than as required by applicable securities laws.
About ARC
ARC Resources Ltd. is a pure-play Montney producer and one of Canada's largest dividend-paying energy companies, featuring low-cost operations. ARC's investment-grade credit profile is supported by commodity and geographic diversity and robust risk management practices around all aspects of the business. ARC's common shares trade on the Toronto Stock Exchange under the symbol ARX.
ARC Resources LTD.
Please visit ARC's website at www.arcresources.com or contact Investor Relations:
E-mail: IR@arcresources.com
Telephone: (403) 503-8600
Fax: (403) 509-6427
Toll Free: 1-888-272-4900
ARC Resources Ltd.
Suite 1500, 308 - 4 Avenue SW
Calgary, AB T2P 0H7
SOURCE ARC Resources Ltd.
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