TORONTO, Feb. 27, 2012 /CNW/ - Unique Broadband Systems, Inc. ("UBS" or
the "Company") (TSXV: UBS) today announced that its board of directors,
after careful consideration and receipt of the recommendation of a
special committee comprised of its non-management directors, and after
consultation with its legal advisors, unanimously recommends that
shareholders of UBS ("UBS Shareholders") REJECT the unsolicited offer (the "Dolgonos Offer") from 2064818 Ontario Inc.
("206 Ontario"), a corporation owned by a trust of the family of Mr.
Alex Dolgonos ("Mr. Dolgonos"), to acquire up to 10,000,000 common
shares of UBS, representing less than 10% of the Company's issued and
outstanding common shares.
The Board recommends to UBS Shareholders that they REJECT the Dolgonos Offer and DO NOT TENDER their UBS Shares for the following reasons:
The Dolgonos Offer is coercive as UBS Shareholders will potentially
remain as minority shareholders in a company that is effectively
controlled by Mr. Dolgonos and has increased risk of having no equity
The Dolgonos Offer will disrupt and distract the board of directors of
UBS from its primary goals of advancing the current proceedings under
the Companies Creditors' Arrangement Act ("CCAA") and determining the validity and quantum of over $8 million of
alleged claims by affiliates of Mr. Dolgonos (the "DOL Claims") and
over $10 million of alleged claims by affiliates of Mr. Gerald McGoey,
the former Chief Executive Officer and Chairman of UBS.
The Dolgonos Offer, being a partial take-over bid for less than 10% of
the UBS Shares, is highly opportunistic and disadvantageous to UBS
Shareholders. The Dolgonos Offer does not provide UBS Shareholders
with a true exit opportunity, yet provides Mr. Dolgonos with effective
control of UBS at minimal cost.
The Dolgonos Offer, if successful, provides Mr. Dolgonos with indirect
control over litigation against affiliates of Mr. Dolgonos.
Mr. Dolgonos is acting in his own personal interest, and has a direct
conflict of interest relative to the majority of UBS Shareholders,
given that he is pursuing more than $8 million of claims against UBS.
Since the stated purpose of the bid is to replace the board of directors
of UBS, the Dolgonos Offer cannot be properly assessed without an
articulation of Mr. Dolgonos' strategy for the future direction of UBS,
including with respect to the resolution of the DOL Claims.
The Dolgonos Offer takes advantage of UBS Shareholders by offering to
purchase UBS Shares at a "premium" to a market price that has been
devalued as a direct result of the DOL Claims.
The Dolgonos Offer will force UBS to incur significant costs.
The Dolgonos Offer is highly conditional and cannot be considered a firm
offer due to the unreasonable and discretionary nature of its
conditions that allow 206 Ontario, in its sole discretion, not to
UBS' directors and officers will not be tendering their UBS Shares to
the Dolgonos Offer.
The recommendation of UBS' board of directors to UBS Shareholders that
they REJECT the Dolgonos Offer and DO NOT TENDER their UBS Shares, as well as a more detailed discussion of the reasons
for rejecting the Dolgonos Offer is contained in the Directors'
Circular being mailed to each UBS Shareholder and filed with the
Canadian securities regulatory authorities. The Directors' Circular is
available on SEDAR at www.sedar.com. UBS Shareholders are advised to read the Directors' Circular carefully
and in its entirety, as it contains important information regarding
UBS, 206 Ontario and the Dolgonos Offer.
How to Withdraw Tendered UBS' Shares
To reject the Dolgonos Offer, if you have not tendered your UBS Shares,
you do not need to do anything. Simply do not tender your UBS Shares
to the Dolgonos Offer. UBS Shareholders who have already tendered
their UBS Shares to the Dolgonos Offer can withdraw them at any time
before they have been taken up and accepted for payment by 206 Ontario.
UBS Shareholders holding shares through a dealer, broker or other
nominee should contact such dealer, broker or nominee to withdraw their
UBS Shares. Shareholders requiring assistance to withdraw UBS Shares
from the Dolgonos Offer should contact: firstname.lastname@example.org.
Update on the Motion
As previously announced, UBS made a motion (the "Motion") in the
proceedings commenced under the CCAA to enforce the stay of proceedings
as against the Dolgonos Offer and to suspend the holding of
shareholders' meetings until all claims have been determined under
CCAA. The Motion, which was originally scheduled to be heard on
February 21, 2012, has been rescheduled to be heard on March 2, 2012
for the purpose of enforcing the stay of proceedings as against the
Dolgonos Offer. The portion of the Motion relating to suspending the
holding of shareholders' meetings has been adjourned until such time as
206 Ontario requisitions such a meeting.
Declaration of a Dividend by Look Communications Inc.
On February 24, 2012, the board of directors of Look Communications
Inc., a company in which the Company indirectly holds a 39% economic
interest, announced the declaration of a dividend on its common
shares. It is expected that this dividend will be paid on or about
March 13, 2012. UBS anticipates receiving approximately $2,739,000 as
a result of this dividend, which will have the effect of materially
improving UBS' cash position.
About Unique Broadband Systems, Inc.
UBS's shares are listed on the TSX Venture Exchange under the symbols "UBS". More information on UBS can be
found at www.sedar.com.
The corporate information contained in this release includes
forward-looking statements regarding future events and costs that
involve risks and uncertainties that could cause actual results to differ materially. Assumptions used in the preparation of
such information, although considered reasonable by UBS at the time of
preparation, may prove to be incorrect. The actual results achieved may
vary from the information provided herein and the variations may be
material. Consequently, there is no representation by UBS that actual
results achieved will be the same in whole or in part as those
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 Unique Broadband Systems, Inc.
For further information:
Grant McCutcheon, CEO