MONTREAL, Aug. 6 /CNW Telbec/ - Cosmos Capital Inc. ("Cosmos Capital")
announced today that it has sent, on behalf of a group of investors (the
"Cosmos Group"), a letter to the Special Committee of Cossette which
reiterated its request to access the Company's books and records ("Dataroom")
and allow it to conduct its confirmatory due diligence as previously stated in
its July 20th letter attached to its same date press release.
Cosmos requests that initial access be granted no later than August 17th,
2009, stating this will have allowed the Company an ample four weeks for the
preparation of the Dataroom since the request was first made on July 20th.
In its letter, which is attached below, the Cosmos Group expressed its
concern at the lack of urgency and progress up until now. It explained:
"Notwithstanding the poor operating and financial performances during
recent quarters, the senior management team's lackadaisical response to it,
and the resulting ongoing financial stress on the organization, we are willing
to reaffirm our price of $4.95 if we are granted access to the Company's books
and records by the date mentioned above. In the event that we are not, we will
reassess our price and interest in the transaction."
As a reminder, on July 20th, 2009, Cosmos Capital announced that it had
submitted a proposal to the Board of Directors of Cossette Inc. ("Cossette")
to acquire all of the issued and outstanding subordinate voting shares of
Cossette at a price of $4.95 per share. This price represented a 52.3% premium
over the previous closing price and a 45.7% premium over the average trading
price of Cossette's subordinate voting shares on the TSX for the 30 trading
days preceding the announcement. Cosmos Capital also announced that it had
entered into a lock-up agreement with Burgundy Asset Management Ltd.
("Burgundy") with respect to its 1,847,500 subordinate voting shares of
Cossette that it owns, representing approximately 11.1% of Cossette's
outstanding shares on a fully diluted basis. Together, the members of the
Cosmos Group and Burgundy control approximately 30% of the outstanding shares
Letter to the Special Committee of the Board of Directors
August 6, 2009
Mr. Jean Lavigueur,
Chairman of the Special Committee
Special Committee of the Board of Directors of Cossette Inc.
801 Grande Allée Ouest, Suite 200
Québec City, Québec
Dear Mr. Lavigueur,
On July 20, 2009, Cosmos Capital Inc. ("Cosmos") informed the Board of
Directors of Cossette Inc. ("Cossette" or the "Company") in writing of
the intention of a group of investors (the "Cosmos Group") to acquire all
of the outstanding subordinate voting shares of Cossette (other than
those that it does not already own) for $4.95 per share representing a
52.3% premium over the prior day's close.
As indicated in our letter, Cosmos has entered into a lock-up agreement
with Burgundy Asset Management Ltd. ("Burgundy") regarding 1,847,500
subordinate voting shares, representing 11.1% of the shares on a fully-
diluted basis. In addition, members of Cosmos and affiliates currently
own 2,911,580 multiple voting shares and 205,773 subordinate voting
shares representing 18.7% of the outstanding shares on a fully-diluted
Since the announcement, Cosmos has not received any written communication
from the Special Committee regarding its intention to discuss our
proposal and our request for due diligence. The Cosmos Group owns a
significant stake in the Company and is very sensitive to these delays.
Although the Cosmos Group has completed extensive preliminary due
diligence based on publicly available information, our proposal is, as
previously stated in Section 5 of our aforementioned letter, subject to
confirmatory due diligence which is standard for a transaction of this
We therefore request initial access to Cossette's books and records no
later than 5pm Eastern time August 17th, 2009. The Company will thus have
had an ample four weeks to prepare for our due diligence request.
While it is our strong preference to continue to work with you to reach a
binding agreement in a cooperative and expeditious fashion, we have
become increasingly concerned by the lack of urgency and progress, which
is not in the best interest of the Company and Shareholders.
Notwithstanding the poor operating and financial performances during
recent quarters, the senior management team's lackadaisical response to
it, and the resulting ongoing financial stress on the organization, we
are willing to reaffirm our price of $4.95 if we are granted access to
the Company's books and records by the date mentioned above. In the event
that we are not, we will reassess our price and interest in the
We trust that the Special Committee will be responsive to this request
and facilitate a transaction with Cosmos in a timely manner. We look
forward to hearing from you shortly.
This news release contains "forward-looking statements" regarding the
proposal of the Cosmos Group to purchase all of the subordinate voting shares
of Cossette including subordinate voting shares resulting from the conversion
of all outstanding multiple voting shares (other than shares owned by members
of the Cosmos Group and their affiliates), including statements regarding the
terms and conditions of the proposed offer. Readers are cautioned not to place
undue reliance on forward-looking statements. Actual results and developments
may differ materially from those contemplated by these statements depending
on, among others, the risks that the Cosmos Group will not proceed with a
formal offer or its offer will be unsuccessful for any reason.
The forward-looking statements contained in this document are made as of
the date of this document and the Cosmos Group does not undertake any
obligation to update publicly or revise any of the forward-looking statements
contained in this news release, whether as a result of new information, future
events or otherwise, except as required by law. The forward-looking statements
contained in this news release are expressly qualified by this cautionary
This news release does not constitute an offer for or solicitation of
shares in any jurisdiction. Any such solicitation would be made only by formal
offer and only in those jurisdictions where the Cosmos Group may legally do
so. The issuance of this news release is not an admission that anyone named
herein owns or controls any securities described herein or is a joint actor
with another named entity (except as expressly disclosed).
For further information:
For further information: Media: Claude Bédard, (514) 515-6024,
email@example.com; Shareholders and financial analysts: Jean-François
Desjardins, (514) 281-3245, firstname.lastname@example.org