Cossette enacts shareholder rights plan to prevent creeping takeover



    KOS (TSX)

    QUEBEC CITY, Aug. 4 /CNW Telbec/ - Cossette Inc. ("Cossette" or the
"Company") announced that it has enacted a shareholder rights plan earlier
today, effective as of such date. The plan is designed to prevent a creeping
takeover of the Company and preserve its ability to obtain the best value for
all shareholders. The plan will also provide the share ownership stability to
protect the opportunity for all shareholders to participate in any future
transaction involving the Company.
    This announcement and the implementation of the plan are subsequent to
the following announcement of the Cosmos Group last July 20:

    
    - it has submitted an unsolicited and non-binding proposal to the Board
      of Directors of Cossette to acquire all of the issued and outstanding
      subordinate voting shares of the Company, including those resulting
      from the conversion of all outstanding multiple voting shares;

    - its members and their affiliates currently own 2,911,580 multiple
      voting shares and 205,733 subordinate voting shares, representing
      approximately 18.7% of Cossette's outstanding shares;

    - it has entered into a lock-up agreement with Burgundy Asset Management
      Ltd. with respect to an offer as contemplated under the proposal.
      Burgundy owns 1,847,500 subordinate voting shares of Cossette,
      representing approximately 11.1% of Cossette's outstanding shares. The
      lock-up agreement has to date not been filed with the Canadian
      securities authorities.
    

    The Board is of the view that a creeping takeover would be detrimental to
the best interests of the shareholders and not in the best interest of the
Company, and the plan gives the Board of Directors an effective tool in
responding to an attempt to acquire control through a progressive increase in
ownership without an offer to all shareholders.
    The rights plan will not prevent an offer made to all shareholders for
all of their shares.
    The rights issued under the rights plan will become exercisable when a
person, together with any parties related to it, acquires or announces its
intention to acquire 20% or more of the Company's subordinate voting shares or
multiple voting shares or 20% or more of the Company's outstanding shares (as
a single class) without complying with the "Permitted Bid" provisions of the
rights plan or without approval of the Board of Directors of the Company.
Should such an acquisition occur, rights holders (other than the acquiring
person and related persons) can purchase subordinate voting shares of the
Company at half the prevailing market price at the time the rights become
exercisable.
    Under the rights plan, members of the Cosmos Group beneficially own more
than 20% of the outstanding shares of Cossette (as a single class), due to the
lock-up agreement entered into with Burgundy Asset Management. They will thus
be considered as "grandfathered" persons. However, this exemption shall cease
to be applicable in the event the members of the Cosmos Group become the
beneficial owners of additional shares of the Company.
    In addition, certain members or former members of Cossette's management,
namely Claude Lessard, Pierre Delagrave, François Duffar and Georges Morin,
are, under the rights plan, also considered to own more than 20% of the
outstanding shares of Cossettte (as a single class), due to their actual
shareholding in the Company and to the Shareholders and Voting Trust Agreement
dated June 18, 1999. They will consequently be considered as "grandfathered"
persons.
    Under the rights plan, a "Permitted Bid" is a bid having a minimum
duration of 60 days that is made to all holders of the Company's subordinate
voting shares and multiple voting shares for all of their shares and which
provide that the offeror may take up and pay for the shares only if at least
50% of the outstanding subordinate voting shares and 50% of the multiple
voting shares, other than those owned by the offeror and certain related
parties and by the grandfathered persons, have been tendered.
    The rights have been issued on August 4, 2009 to holders of record at
6:00 p.m. on August 3, 2009. The issuance of the subordinate voting shares
upon exercise of the rights is subject to receipt of certain regulatory
approvals. The rights plan will terminate on February 4, 2010.

    Cossette Inc. offers a full range of leading-edge communication services
to clients of all sizes, including some of the most prestigious brands in the
world. A customer-driven organization built around highly specialized business
units, Cossette also offers Convergent Communications(TM), a unique working
method that brings added value to the client by integrating various services
offered by the Group, including strategic planning and research, advertising,
media buying and channel planning, sales promotion, direct response, database
and direct marketing, customer relationship management, interactive marketing
and technology solutions, public relations, organizational communication and
change management, sponsorship and alliance marketing, branding and design,
ethnic marketing, business-to-business communications (B2B practices) and
print and video production. Cossette has approximately 1,485 employees and
offices in Quebec City, Montreal, Toronto, Vancouver, Halifax, New York,
Irvine, Los Angeles, London and Shanghai.
    %SEDAR: 00012070EF




For further information:

For further information: Financial Analysts only: Martin Faucher,
Vice-President and Chief Financial Officer, (418) 521-3784; Investors: Francis
Trudeau, Director, Acquisitions and Investor Relations, (514) 282-4633;
Medias: Mathieu Claise, Optimum Public Relations, (418) 521-3770; Source:
Cossette Inc., www.cossette.com

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COSSETTE INC.

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