CWAL Increases Offer Price to $4.65 per share for Coast Wholesale Appliances Inc; Offer extended to April 30, 2014; Coast Agrees to Waive Rights Plan if Minimum Tender Condition Satisfied
VANCOUVER, April 14, 2014 /CNW/ - CWAL Investments Ltd. ("CWAL"), a private company owned by Harlow Burrows, Gordon Christoff and Randy Ryzak, announced today that it will increase its offer price to $4.65 cash per Common Share to purchase all of the issued and outstanding common shares (the "Common Shares") of Coast Wholesale Appliances Inc. ("Coast") (TSX: CWA) that are not already owned by CWAL and its joint actors (the "Increased Offer").
The Increased Offer price represents a 26% premium to the volume-weighted average trading price of the Common Shares over the 90 trading days ended March 4, 2014, the date CWAL first announced its offer, and a 20% premium over the closing price of the Common Shares on that date.
CWAL has amended the terms of the Increased Offer to provide that the minimum tender condition of 66.67% of the total number of Common Shares outstanding and a majority of the Common Shares not beneficially owned by CWAL and its joint actors (in each case calculated on a fully diluted basis) may not be waived by CWAL. CWAL has also extended the expiry date for shareholders to tender to the Increased Offer to 4:00 pm (Toronto time) on April 30, 2014.
Coast has agreed that if CWAL's minimum tender condition is satisfied, it will waive application of its shareholder rights plan to permit CWAL to take up Common Shares tendered to the Increased Offer. If and only if the minimum tender condition and all other terms of the Increased Offer are satisfied, CWAL has agreed that the expiry time for the Increased Offer will be further extended for a minimum of ten business days.
If the minimum tender condition is not met, the Increased Offer will be withdrawn. Shareholders are encouraged to tender their Common Shares well in advance of the April 30, 2014 expiry time.
Should the Increased Offer be withdrawn, CWAL believes the trading price and liquidity of the Common Shares will decline significantly, possibly to levels below those observed prior to the announcement of the offer on March 4, 2014. Coast has not identified any alternative transaction to the Increased Offer that would deliver greater value for Coast's shareholders.
The details of the Increased Offer will be set out in a notice of variation to be mailed to Coast's shareholders and filed with securities regulatory authorities within the next few days.
Harlow Burrows, the President of CWAL, stated "CWAL's Increased Offer price of $4.65 per Common Share represents our best and final offer. Since CWAL first approached Coast regarding an offer for the Common Shares on January 20, 2014, and since the announcement of our offer on March 4, 2014, Coast has not identified any alternative transaction that would deliver greater value for Coast's shareholders.
"The Increased Offer provides Coast's shareholders with premium value and immediate liquidity, without transaction costs, for an investment that has traded at a persistent valuation discount to its larger, more diversified household appliance and home furnishing peers, and with median trading volumes of less than 6,000 shares per day since its inception as a public entity in 2005.
"CWAL encourages all Coast shareholders to accept the Increased Offer by depositing their Common Shares prior to the April 30, 2014 expiry time in accordance with the instructions to be set forth in CWAL's notice of variation."
SOURCE CWAL Investments Ltd.