Toronto Stock Exchange Symbol: WXX
BURLINGTON, ON, June 30 /CNW/ - West 49 Inc. (TSX: WXX) (the "Company"), Canada's leading action sport retailer, today announced that it has entered into an acquisition agreement pursuant to which Billabong International Limited ("Billabong") has agreed, subject to certain conditions, to acquire all of the outstanding common shares and preferred shares of the Company for cash at a price of C$1.30 per share. Holders of the Company's preferred shares will also receive accrued and unpaid dividends on their preferred shares. The transaction is expected to be effected by way of a plan of arrangement and is expected to close in late August or early September 2010.
The closing price on June 29, 2010 was C$0.55 per share, with the volume weighted average price of the common shares over the 20 trading days ended June 29, 2010 being C$0.54. The Company's board of directors, based on the unanimous recommendation of a special committee of independent directors, has unanimously recommended that security holders vote in favour of the transaction. The special committee made their recommendation with the benefit of input from its independent legal and financial advisors. National Bank Financial Inc., independent financial advisor to the special committee, has rendered an opinion to the special committee, subject to the assumptions and limitations described therein, that the consideration to be offered pursuant to the transaction is fair, from a financial point of view, to the Company's common shareholders.
"This transaction delivers a significant premium and an excellent liquidity opportunity to our shareholders that is unanimously supported by the Company's board of directors," said Lucio Di Clemente, Chairman of the special committee. "Furthermore, Billabong will strengthen the Company's future growth prospects and provide new business opportunities to the benefit of both our customers and our employees."
"This is a proud day not only for myself as founder of the Company but for all of our employees who have contributed to the growth and success of the Company over the past 15 years," said Sam Baio, President and Chief Executive Officer, West 49 Inc. "Becoming part of the global Billabong family will create new opportunities for our business and, just as importantly, new opportunities for our valued employees throughout the organization."
The transaction is subject to the approval of the Company's security holders at a special meeting anticipated to be held in August 2010. Completion of the transaction is also subject to certain other customary conditions.
Certain significant security holders together with the Company's board of directors, who collectively hold approximately 56% of the outstanding common and preferred shares, have entered into lock-up agreements with Billabong pursuant to which they have committed to vote their securities in favour of this transaction, subject to certain terms and conditions.
The acquisition agreement entered into between the Company and Billabong provides for, among other things, a non-solicitation covenant on the part of the Company, subject to customary "fiduciary out" provisions, which entitle the Company to consider and accept a superior proposal, subject to the right of Billabong to match the superior proposal and the payment to Billabong of a break-up fee of approximately C$2.5 million. The lock-up agreements automatically terminate if the acquisition agreement is terminated in certain circumstances, including in the event that the Company terminates the acquisition agreement to accept a superior proposal.
Further details of the transaction are expected to be included in a proxy circular to be mailed to security holders in due course. The full acquisition agreement, as well as the lock-up agreements with security holders, will be available on SEDAR at www.sedar.com.
Legal counsel to West 49 Inc.'s special committee is Goodmans LLP, and to the Company and certain of its key shareholders is Stikeman Elliott LLP. Billabong International Limited's financial advisors are Goldman Sachs, and its legal counsel is Osler, Hoskin & Harcourt LLP.
About West 49 Inc.
West 49 Inc. is a leading Canadian specialty retailer of apparel, footwear, accessories and equipment related to the youth action sports lifestyle. The Company's stores, which are primarily mall-based, carry a variety of high-performance, premium brand name and private label products that fulfill the lifestyle needs of identified target markets, primarily tweens and teens. At May 1, 2010, the Company operated 138 stores in nine provinces, under the banners West 49, Billabong, Off The Wall, Amnesia/Arsenic and D-Tox. The Company's common shares are listed on the Toronto Stock Exchange under the symbol WXX. The Company has approximately 64 million common shares outstanding.
About Billabong International Limited
Billabong International Limited is an Australia-based company involved in the design, marketing, distribution, wholesaling and retailing of apparel, accessories, eyewear, wetsuits and hardgoods in the global boardsports sector. Brands within the Billabong group include Billabong, Element, Von Zipper, Honolua Surf Company, Kustom, Palmers Surf, Nixon, Xcel, Tigerlily, Sector 9 and DaKine. The company's shares are publicly listed on the Australian Securities Exchange (ASX) under the ticker BBG.
Certain statements in this release may be considered forward-looking statements, which reflect the board and management's current beliefs and expectations and which involve assumptions about expected future events or results that are subject to inherent risks and uncertainties. There is significant risk that assumptions and other forward-looking statements will not prove to be accurate. Many factors could cause actual future results, conditions or events to differ materially from the results or outcomes expressed, including risks related to competition, changes in demographic trends, changes in consumer preferences and discretionary spending patterns, changes in business and economic conditions, human resource matters, legal proceedings, challenges to intellectual property rights, availability of credit facilities, and changes in laws, regulations, and accounting policies and practices. The foregoing list of factors is not exhaustive. Accordingly, investors should not place undue reliance on forward-looking information. The Company includes in publicly available documents filed from time to time with securities commissions and the Toronto Stock Exchange, a thorough discussion of the risk factors that can cause anticipated outcomes to differ from actual outcomes. Forward-looking information is provided as of the date of this news release only, it should not be relied upon as of any other date, and the Company assumes no obligation to update or revise this information to reflect new events or circumstances, except as expressly required by law. There can be no assurance that the acquisition agreement will receive all necessary consents and approvals or that the proposed transaction or any alternative transaction will be completed.
SOURCE WEST 49 INC.
For further information: For further information: Rhonda Biddix, Chief Financial Officer and Corporate Secretary, West 49 Inc., (905) 336-5454 ext. 224, E-mail: firstname.lastname@example.org; Lawrence Chamberlain, Investor Relations, The Equicom Group Inc., (416) 815-0700 ext. 257, E-mail: email@example.com