TORONTO, Nov. 20 /CNW/ - Canadex Resources Limited (the "Company")
(TSX:CDX) announces that it has entered into a definitive support agreement
("Support Agreement") pursuant to which Student Transportation of America Ltd.
("STA") will offer to acquire (the "Offer") all of the outstanding common
shares ("Common Shares") of the Company for cash consideration of $5.72 per
Common Share and all of the outstanding Class A preferred shares ("Preferred
Shares") of the Company for cash consideration of $1.00 per Preferred Share.
The consideration under the Offer represents a 35% premium over the
market price of the Common Shares as of April 27, 2007, the day prior to the
announcement of the strategic review process by the Company, and a 12% premium
over the closing market price of the Common Shares on November 19, 2007.
The board of directors of the Company, based on the recommendation of its
special committee of independent directors, has unanimously resolved to
recommend that holders of Common Shares and Preferred Shares accept the Offer.
Sun Pac Foods Limited and John Riddell, who collectively hold 35% of the
outstanding Common Shares and 70% of the outstanding Preferred Shares, have
agreed to tender all Common Shares and Preferred Shares that they own to the
Offer. KPMG Corporate Finance is acting as financial advisor to Canadex and
has provided the board of directors with a fairness opinion that the
consideration to be received by holders of the Common Shares and Preferred
Shares pursuant to the Offer is fair from a financial point of view.
The Support Agreement provides for the payment by the Company of a break
fee equal to $1.4 million in certain circumstances, and reimbursement by the
Company of STA's expenses up to $500,000 under certain other circumstances.
The Support Agreement also provides for reimbursement by STA of the Company's
expenses up to $500,000 under certain circumstances. In addition, the Support
Agreement includes a non-solicitation covenant on the part of the Company and
a right in favour of STA to match any competing offers.
The Offer will be conditional upon acceptance by holders of not less than
66 2/3% of the Common Shares and Preferred Shares as well as receipt of all
necessary regulatory approvals and other customary conditions, including the
entering into of non-competition and/or employment agreements with certain
members of management. A take-over-bid circular containing the terms of the
Offer will be mailed to the holders of Common Shares and Preferred Shares,
together with a directors' circular and other related documents, on or before
December 11, 2007. The Offer, unless extended, will expire 36 days from its
commencement, subject to receipt of any required regulatory approvals.
STA is the fourth-largest provider of school bus transportation services
in North America, conducting operations through local operating subsidiaries.
STA has become a leading school transportation and management company by
aggregating operations through the consolidation of existing providers and
conversion of in-house operations. STA currently operates more than
5,000 school vehicles in North America. For more information, please visit
www.sta-ips.com. The cash consideration under the Offer will be financed with
cash balances on hand at the time of closing and STA's existing credit
Canadex Resources Limited Profile
The Company is a transportation and energy company consisting of two
distinct and separately managed business segments. The school bus division is
one of the largest independent school bus operators in Ontario and its energy
division holds minority non-operating positions in oil and gas investments in
For further information:
For further information: Vincent McEwan, Secretary-Treasurer, Canadex
Resources Limited, (905) 792-2700