Trading Symbol: MCV
TORONTO, Jan. 30, 2012 /CNW/ - McVicar Industries Inc. ("McVicar") announces today that it has entered into a support agreement (the "Support Agreement") with its 56.2% owned subsidiary, Jite Technologies Inc. ("Jite" TSXV symbol - JTI) pursuant to which McVicar has agreed to offer to
acquire, directly or indirectly, all of the 8,788,363 outstanding
common shares of Jite which it does not already own and up to an
additional 1,186,000 shares issuable upon exercise of existing options
for a cash price of $0.60 per share (the "Offer"). The purchase price under the Offer represents a 115.4% premium over
the average closing price for the last 30 trading days of $0.2785. The
transaction is valued at approximately $5.4 million.
The Offer, when made, will constitute an "insider bid" within the
meaning of Multilateral Instrument 61-101 - Protection of Minority Shareholders in Special Transactions of the Canadian Securities Administrators ("MI61-101") and the parties have agreed to comply in all respects with MI6-101 in
connection with the Offer. In this regard, a Special Committee of the
board of directors of Jite, consisting of Mr. Colin Digout, the
independent director of Jite, has received a valuation and fairness
opinion, prepared in compliance with the applicable provisions of
MI61-101, from investment banking firm, Evans & Evans, Inc. of
Vancouver, to the effect that the offering price is below what they
consider fair from a financial point of view to the minority
shareholders of Jite as the firm has ascribed a value range of $15.3 to
$17.0 million ($0.76 to $0.85 per share) to Jite and its business, on a
going concern basis, as at November 30, 2011. However, Evans & Evans
indicated that there are qualitative factors, including (i) the lack of
liquidity and low volume of trading in Jite shares over the past
several months; (ii) the offer price represents a 115.44% premium over
the average closing price of Jite shares on the TSXV for the previous
30 days; and (iii); the Offeror currently holds a 56.2% control
position and provides all senior management personnel to Jite, which
contribute to overall fairness that shareholders may consider in
responding to the offer. The Special Committee considered the
perceived investment risk applicable to companies with Chinese
operations as an additional qualitative factor to be considered.
The selection of Evans & Evans, Inc. as valuator was made by the Special
The board of directors of Jite, upon consultation with its financial and
legal advisors and following receipt of a recommendation of the Special
Committee, has unanimously accepted the Special Committee's
recommendation and determined that the Offer is fair to the
Shareholders (other than Offeror) and is in the best interests of Jite
and the Shareholders (other than Offeror). Accordingly, the board has
unanimously approved the Support Agreement and the recommendation that
Shareholders (other than Offeror) accept the Offer.
Concurrently with the execution of the Support Agreement, the directors
and officers of Jite entered into lock-up agreements with McVicar
pursuant to which they have agreed to deposit all Jite shares
(including shares issuable upon exercise of any options held) under the
Offer. The locked up shareholders own, in the aggregate 122,290 Jite
shares and 1,186,000 options, representing approximately 6.1% of the
Jite Shares on a fully diluted basis.
The Offer will be made in the form of a take-over bid. The Support
Agreement also contains customary non-solicitation covenants and Jite
has reserved the right to respond to superior proposals if certain
conditions are met, subject to McVicar's right to match any such
The Offer will be subject to customary conditions, including at least
90% of the outstanding shares of Jite on a fully diluted basis but
excluding the Jite shares held by the Offeror, its associates and
affiliates, having been validly deposited under the Offer and not
withdrawn or, if such condition is waived by the Offeror, in its sole
discretion, such number of shares of Jite having been tendered and not
withdrawn which, together with shares of Jite owned by the Offeror, its
associates and its affiliates, amounts to at least 66.7% of the
outstanding shares of Jite on a fully-diluted basis.
The full and important details of the Offer will be included in the
formal offer and takeover bid circular, which is expected to be mailed
to shareholders in the next 10 days, together with a directors'
circular which will set out the board of director's unanimous
recommendations that shareholders accept the Offer. Once mailed, the
take-over bid circular and the directors' circular will be available on
SEDAR at www.sedar.com.
McVicar Industries Inc., headquartered in Toronto, Canada, is focused on
investments and acquisitions of businesses in China. At present,
McVicar has operations in both electronic components and specialty
chemicals in four operations in China.
Jite designs and manufactures electronic and electrical connection
devices for security, industrial control, automation,
telecommunication, and power supply industries. JITE is head quartered
in Toronto, Canada and carries out research and manufacturing
operations in Shenzhen China at its ISO 9001 certified facility. For
more information, visit JITE at www.jite.com.
This press release contains forward-looking statements which reflect the
Corporation's current expectations regarding future events. The
forward-looking statements involve risks and uncertainties. Actual
results could differ materially from those projected herein. Although
we believe that our expectations are based on reasonable assumptions,
we can give no assurance that our expectations will materialize.
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
SOURCE McVicar Industries Inc.
For further information:
McVicar Investor Contact: Ms. eXavier Peterson or Mr. Winfield Ding,
Chief Financial Officer, Tel: (416) 366-7420; firstname.lastname@example.org or email@example.com