UBS Recommends Rejection of Unsolicited Offer from 2064818 Ontario Inc.

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:

  1. 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 value.

  2. 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.

  3. 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.

  4. The Dolgonos Offer, if successful, provides Mr. Dolgonos with indirect control over litigation against affiliates of Mr. Dolgonos.

  5. 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.

  6. 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.

  7. 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.

  8. The Dolgonos Offer will force UBS to incur significant costs.

  9. 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 proceed.

  10. 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: irinfo@uniquebroadband.com.

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 forecast.

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
(905) 660-8100

Profil de l'entreprise

Unique Broadband Systems, Inc.

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