Maxam's "stalking horse" proposal rejected by C.A. Bancorp
Shareholders urged to voice their opinion
VANCOUVER, Feb. 1 /CNW/ - Maxam Opportunities Fund Limited Partnership and Maxam Opportunities Fund (International) Limited Partnership (together, "Maxam") announce that it intends to allow its offer to expire on February 2, 2010 and that its "stalking horse" proposal was rejected by C.A. Bancorp Inc. (TSX:BKP).
On January 13, 2010 Maxam contacted C.A. Bancorp's financial advisor to negotiate a transaction on a friendly basis. In response to Maxam's overtures, C.A. Bancorp proposed prohibitive and non-commercial terms including the following conditions:
- Maxam could not amend or extend its existing $1.45 offer without
written consent from the C.A. Bancorp board;
- For a period of six months, Maxam would be unable to make any public
announcements or present a new take-over bid for C.A. Bancorp shares
to shareholders without written consent from the C.A. Bancorp board;
- Maxam could not enter into any agreements or arrangements with any
potential financing sources.
The onerous terms dictated by C.A. Bancorp indicated an unwillingness to enter into any constructive discussion with Maxam and Maxam believes they were designed solely to frustrate Maxam and its offer to C.A. Bancorp shareholders. Further, C.A. Bancorp would provide no indication of what confidential information, if any, would be made available if in fact Maxam did enter into an agreement with C.A. Bancorp.
Maxam's primary concern with the proposed conditions was that C.A. Bancorp's board of directors could recommend either no transaction or, alternatively, a non-cash or partial cash transaction for C.A. Bancorp. Under these scenarios Maxam would be precluded from making an all-cash offer directly to shareholders.
On January 29, 2010 Maxam made a further attempt to negotiate a mutually beneficial transaction with C.A. Bancorp. Maxam offered to enter into a transaction whereby the board of directors of C.A. Bancorp would agree to support an acquisition of C.A. Bancorp for $1.45 per share and C.A. Bancorp would be allowed to continue to seek out a prospective purchaser at a higher price or an alternative transaction to the Maxam offer for a period of 30 days. In the event that management of C.A. Bancorp was successful in soliciting an offer superior to the Maxam offer, C.A. Bancorp could terminate the arrangement with Maxam upon payment of a break fee of less than three cents per share. In addition, Maxam agreed that it could not match a superior offer. In effect, Maxam offered C.A. Bancorp's shareholders the comfort and protection of a firm, all cash offer of $1.45 per share while allowing C.A. Bancorp to continue soliciting superior proposals. To date, C.A. Bancorp has rejected this proposal.
As of February 2, 2010, over 60 days will have passed since Maxam's announcement of its intention to make the offer. During this period, management of C.A. Bancorp has repeatedly advised shareholders to reject the Maxam offer and discouraged shareholders from tendering their shares to the Maxam offer. Maxam believes this provided management of C.A. Bancorp and its financial advisors an extended period of time in which to solicit a superior offer or competing indications of interest from other parties. To date, management of C.A. Bancorp has not announced any commitment or indication of interest which would be superior to the Maxam offer.
As a result of C.A. Bancorp's inexplicable refusal to enter into discussions with Maxam, Maxam intends to allow its offer to acquire all of the outstanding shares of C.A. Bancorp at $1.45 per share in cash to expire at 4:00 pm (Vancouver time) on February 2, 2010.
We are disappointed that our attempts to provide shareholders with liquidity at an attractive, all-cash price have been rebuffed by C.A. Bancorp's board. Further, we believe the outright rejection of Maxam's latest proposal, in light of the increased economic uncertainty, is not in C.A. Bancorp shareholders' best interests, and raises serious questions with respect to C.A. Bancorp's corporate governance practices.
Maxam has notified C.A. Bancorp's financial advisor that it is willing to negotiate the terms of a "stalking horse" offer until 4:00 pm (Vancouver time) on February 2, 2010. Shareholders of C.A. Bancorp are urged to contact C.A. Bancorp management immediately to declare their support for Maxam's "stalking horse" proposal.
Upon expiry of the offer on February 2, 2010, Maxam will instruct CIBC Mellon Trust Company, the depositary for the offer, to promptly return all shares tendered.
This news release may contain statements that constitute "forward-looking information" or "forward-looking statements" (collectively "forward-looking information") within the meaning of applicable securities legislation, including statements relating to the expiry of the offer. This forward-looking information is subject to numerous risks and uncertainties, certain of which are beyond Maxam's control. Actual results, performance or achievements may differ materially from those expressed in, or implied by this forward-looking information and, accordingly, no assurance can be given that any events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits that will derive therefrom.
Forward-looking information is based on the estimates and opinions of Maxam's management at the time the information is released and Maxam does not undertake any obligation to update publicly or to revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
Information in this news release concerning C.A. Bancorp is based entirely on publicly available sources and has not been independently verified by Maxam. Maxam assumes no responsibility for the accuracy or completeness of such information.
Note: All financial figures are in Canadian dollars unless noted otherwise.
SOURCE MAXAM OPPORTUNITIES FUND LP
For further information: For further information: Johnny Ciampi, Managing Partner, firstname.lastname@example.org, Tel: (604) 685-0201 (Ext. 103); Sean Morrison, Managing Partner, email@example.com, Tel: (604) 685-0201 (Ext. 102)