HALIFAX, Sept. 16 /CNW/ - Clarke Inc. ("Clarke" or the "Corporation", TSX-CKI, TSX-CKI.DB, TSX-CKI.DB.A) announced a substantial issuer bid (the "Offer") today pursuant to which the Corporation will offer to purchase for cancellation up to $25,000,000 aggregate principal amount of the issued and outstanding Series 2 6.0% convertible unsecured subordinated debentures due December 31, 2013 (the "Debentures") of the Corporation from debentureholders (the "Debentureholders") issued under and pursuant to the provisions of a trust indenture dated December 22, 2005 between the Corporation and Computershare Trust Company of Canada (the "Debenture Trustee"), as trustee, and a supplemental trust indenture thereto between the Corporation and the Debenture Trustee dated November 28, 2006 (the "Trust Indenture") at the purchase price of $750 per $1,000 principal amount of Debenture (the "Purchase Price"). In addition, Debentureholders who tender their Debentures to the Offer will receive a payment in respect of all accrued and unpaid interest outstanding on such Debentures as of the date they are taken up by the Corporation pursuant to the Offer.
If more than $25,000,000 aggregate principal amount of Debentures (or such greater aggregate principal amount of Debentures as the Corporation may determine it is willing to take-up and pay for) are properly tendered to the Offer, the Corporation will take-up and pay for at the Purchase Price the deposited Debentures on a pro-rata basis according to the number of Debentures deposited (or deemed to be deposited) by the Debentureholders (with adjustments to avoid the purchase of less than $1,000 principal amount of Debentures). The Corporation has reserved the right to at any time and from time to time to amend its offer to increase or decrease the maximum number of Debentures the Company may purchase pursuant to the Offer. The Offer is not conditional on any minimum number of Debentures being deposited. The Corporation will fund any purchases of Debentures pursuant to the Offer from cash available on hand and available credit facilities.
As of September 15, 2009, there were $88,464,500 principal amount of Debentures issued and outstanding, and accordingly, the Offer is for up to approximately 28.3% of the total number of issued and outstanding Debentures.
Alexandra Global Master Fund Ltd. ("Alexandra") has agreed, pursuant to a lock-up agreement with the Corporation dated September 2, 2009, to tender an aggregate of approximately $6,000,000 principal amount of Debentures to the Offer.
The Offer is subject to various conditions typical of transactions of this nature. It is anticipated that the offer to purchase and issuer bid circular and other related documents (the "Offer Documents"), containing the terms of the Offer and the instructions for tendering the Debentures will be mailed to Debentureholders and filed with applicable securities regulators on or about September 18, 2009. The Offer will remain open for acceptance for at least 35 days after the date of commencement, unless withdrawn or extended by the Corporation.
National Bank Financial Inc. ("NBF") was engaged by the Board of Directors of Clarke to prepare a valuation report with respect to the Debentures (the "Valuation"), as prescribed under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions. A copy of the Valuation of NBF will be attached to the Offer Documents.
The Valuation contains NBF's opinion that, based on the scope of its review and subject to the assumptions, restrictions and limitations provided therein, the fair market value of the Debentures, as of September 14, 2009, falls within the range (per $1,000 principal amount) of $713 to $796.
The directors of the Corporation believe that the purchase of the Debentures under the Offer represents an effective use of the Corporation's financial resources and is in the best interests of the Corporation. The Offer is not expected to preclude the Corporation from pursuing its foreseeable business opportunities.
In accordance with applicable Canadian securities laws, the Corporation will suspend purchases of the Debentures pursuant to its normal course issuer bid announced on March 12, 2009 until after the expiry or termination of the Offer. Pursuant to its lock-up agreement with Alexandra, the Corporation has agreed that, during the period commencing as of the expiry time of the Offer and continuing for ninety days thereafter, it will not directly or indirectly exchange, repurchase, retire, repay or otherwise acquire any of its outstanding Debentures, or enter into an agreement to do so, upon terms more favourable that the terms upon which the Corporation purchased the Debentures from Alexandra. As of September 15, 2009, the Corporation has purchased an aggregate principal amount of $6,598,000 of the Debentures.
In addition, the Corporation will suspend purchases of its common shares ("Common Shares") pursuant to its normal course issuer bid announced on August 14, 2009 until after the expiry or termination of the Offer. As of the date hereof, the Corporation has not purchased any Common Shares pursuant to such normal course issuer bid. In addition, the Corporation will suspend purchases of its 6.0% convertible unsecured subordinated debentures due December 31, 2012 (the "2012 Debentures") pursuant to its normal course issuer bid announced on December 10, 2008 until after the expiry or termination of the Offer. As of the date hereof, the Corporation has purchased an aggregate principal amount of $4,160,500 of the 2012 Debentures.
Neither the Corporation nor its Board of Directors makes any recommendation to Debentureholders as to whether to tender or refrain from tendering their Debentures to the Offer. Debentureholders are strongly encouraged to review the Offer Documents carefully and to consult with their financial and tax advisors prior to making any decision with respect to the Offer.
Halifax-based Clarke Inc., led by an entrepreneurial team of investment professionals, is an activist and catalyst investment company that creates shareholder value by identifying businesses with the potential for improved performance, and working actively to uncover the value. Clarke's securities trade on the Toronto Stock Exchange (CKI, CKI.DB, CKI.DB.A); for more information about Clarke Inc., please visit our website at www.clarkeinc.com.
This press release may contain or refer to certain forward-looking statements relating, but not limited to, Clarke's expectations, intentions, plans and beliefs with respect to Clarke. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "does not expect", "is expected", "budget", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or equivalents or variations, including negative variations, of such words and phrases, or state that certain actions, events or results, "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved.
Forward-looking statements rely on certain underlying assumptions that, if not realized, can result in such forward-looking statements not being achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of Clarke to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. Although Clarke has attempted to identify important factors that could cause actual actions, events or results or cause actions, events or results not to be estimated or intended, there can be no assurance that forward-looking statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Other than as required by applicable Canadian securities laws, Clarke does not update or revise any such forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events. Accordingly, readers should not place undue reliance on forward-looking statements.
SOURCE Clarke Inc.
For further information: For further information: Melinda Lee, VP, Investments, Clarke Inc., (902) 442-3420, Fax: (902) 423-4001