Cossette Provides an Update on its Review of Cosmos' Amended Offer - Setting
the Facts Straight
KOS (TSX)
QUÉBEC CITY,
While Cosmos' amended offer of
Under the merger agreement with Mill Road, Cossette may only engage in negotiations with, or provide information to, a person making a bona fide written "acquisition proposal" if the Board has determined that it constitutes, or could reasonably be expected to lead to, a "superior proposal" within the meaning of the merger agreement, and that the failure to take such action would be inconsistent with its fiduciary duties.
In order to allow the Board to make such an assessment, the legal advisor to the Special Committee sent a letter yesterday to Cosmos' legal advisors requesting that Cosmos provide Cossette with the following:
- The rationale as to why Cosmos believes it can increase its offer price to $8.10; - Executed documentation evidencing equity and debt financing sufficient to finance a purchase price of $8.10 including a detailed sources and uses of cash schedule; - A specific list of key due diligence items Cosmos requires in order to determine whether it will increase its offer to $8.10; - Details as to Cosmos' intentions with respect to the conditionality of its offer as outlined in Cosmos' take-over bid circular dated October 30, 2009, other than due diligence; and - Confirmation as to whether Cosmos requires a support agreement and if so, its key terms and conditions.
Responses to these questions were received after the close of business yesterday but were found to be incomplete by the Special Committee. Further information is required in order for the Board to determine whether Cosmos' proposal at
Cosmos Activities - Setting the Facts Straight
Cosmos was previously offered access to Cossette's virtual data room which access was declined.
Specifically, contrary to what is alleged in Cosmos' Notice of Variation dated
- On September 22, 2009, Cossette's financial advisor indicated to Cosmos that as a pre-condition to gaining access to Cossette's virtual dataroom, Cosmos would first need to enter into a standard confidentiality and standstill agreement as executed by all other participants in Cossette's strategic review process and indicate a willingness to consider increasing its then proposed offer price of $4.95. - On October 8, 2009, BMO Capital Markets and Genuity Capital Markets participated in a telephone call, at Genuity Capital Markets' request, to discuss the confidentiality and standstill agreement. Genuity Capital Markets stated that absent the removal of the standstill provisions, Cosmos was not willing to execute such an agreement, even though the form of confidentiality and standstill agreement sent to Cosmos' financial advisor provided for the automatic termination of the standstill provisions contained therein in the event of a supported change of control transaction for Cossette or a formal takeover bid for the Shares by any third party. - Cosmos ultimately decided to proceed with its offer without obtaining access to Cossette's non-public information. - On November 6, 2009, Cossette entered into an exclusivity agreement with Mill Road for a period beginning immediately and ending at 11:59 p.m. on Tuesday, November 10, 2009, based on Mill Road's fully financed offer to acquire all Shares at a price of $7.87 per Share. - On the same day, several weeks after their refusal to execute Cossette's standard form of confidentiality and standstill agreement, Cosmos sent a letter to the Chairman of the Special Committee requesting access to the confidential information that Cossette had made available to other potential acquirers. Cosmos also stated that it was prepared to increase the price it had offered to Shareholders upon satisfactory review of the materials made available to other potential acquirers.
Shareholders will be promptly notified of any determination by the Board in respect of Cosmos' amended offer through a press release and notice of change to the directors' circular in accordance with applicable securities laws. Cossette recommends that its shareholders defer making any decision until its Board of Directors has had an opportunity to fully review Cosmos' amended offer.
The management information circular in connection with the special general meeting of shareholders to be held on
About Cossette
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 1,437 employees and offices in
%SEDAR: 00012070EF
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: Sylvie Isabelle, Optimum Public Relations, (418) 521-3184; Source: Cossette Inc., www.cossette.com
Share this article