/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES/
TORONTO, Nov. 25 /CNW/ - Fluid Music Canada, Inc. ("Fluid") (TSX: FMN) and Somerset Entertainment Income Fund ("Somerset") (TSX: SOM.UN) jointly announced today that Fluid has acquired 100% of Somerset.
Pursuant to Fluid's previously announced take-over bid for Somerset (the "Offer"), 13,397,304 Somerset trust units and 3,318,231 Class B LP Units of Somerset Entertainment Limited Partnership (representing approximately 93.8% of Somerset's outstanding units on a fully-diluted basis ("Units")) were deposited to the Offer and taken up by Fluid thereunder. The Offer expired at 6:00 p.m. (Toronto time) on November 25, 2009, all of the conditions of the Offer having then been satisfied.
As contemplated by Fluid's take-over bid circular issued in connection with the Offer, immediately thereafter, a special resolution was passed amending the Somerset Declaration of Trust to permit Fluid to acquire all of the Units held by non-tendering unitholders immediately on giving the requisite notice to such registered non-tendering unitholders of same (the "Compulsory Acquisition"). Having contemporaneously delivered such notice, those Units held by non-tendering unitholders were thereupon deemed to have been immediately transferred to Fluid and such non-tendering unitholders were deemed to have ceased to have any rights as unitholders other than the right to be paid the same consideration per Unit that Fluid would have paid to the non-tendering unitholders had they tendered their Units to the Offer. Non-tendering unitholders who did not elect the form of consideration that they wished to receive for such transferred units prior to the expiry time of the Offer were deemed to have elected the share consideration.
Payment for all such Units acquired pursuant to the Offer and the Compulsory Acquisition will be made on November 26, 2009, comprised of approximately $15,660,832 in cash, 1,340,868 Fluid common shares and $27,561,000 aggregate principal amount of convertible debentures of Fluid.
The convertible debentures of Fluid issued pursuant to the Offer and Compulsory Acquisition have been conditionally approved for listing on the Toronto Stock Exchange, subject to Fluid satisfying the usual requirements of the Exchange. It is anticipated that trading of the convertible debentures will commence on or about November 30, 2009 under the symbol "FMN.DB".
As Somerset has become a wholly-owned subsidiary entity of Fluid, the Somerset units will be delisted from the Toronto Stock Exchange and Fluid will be seeking customary orders to permit Somerset to cease being a reporting issuer under Canadian securities legislation.
About Fluid Music Canada, Inc.
Fluid is a leading private label music aggregation and distribution company, providing music solutions to both business and individual consumers. Fluid has compiled a music library of over five million songs, free of digital rights management restrictions, from a diverse network of producers, including major label, independent and emerging artists. Fluid's revenue model is comprised largely of programming and broadcasting services for retail and hospitality businesses through a wholly-owned subsidiary. Fluid's objective is to grow its business by monetizing its music catalogue through a range of sales channels and partners.
About Somerset Entertainment Income Fund
Somerset is the leading North American producer and distributor of specialty music and DVDs sold internationally through non-traditional music retailers using interactive displays and a distributor of music in digital format. Somerset's extensive distribution network includes mass merchants, specialty chains and independent gift stores in more than 20 countries, including the United States and Canada. Based in Toronto, Canada, Somerset employs over 180 people at offices in Toronto, Ontario (Canada); Buffalo Grove, Illinois, and Minneapolis, Minnesota (U.S.A.); and Essex, England (U.K.).
Certain statements contained in this release, and elsewhere in Fluid's take-over bid circular dated October 20, 2009 for Somerset, concerning Fluid's objectives, goals, strategies, intentions, plans, beliefs, expectations and estimates, and the business, operations, financial performance and condition of Somerset and Fluid are forward-looking statements. The words "believe", "expect", "anticipate", "estimate", "intend", "may", "will", "would" and similar expressions and the negative of such expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are subject to important assumptions, including the following specific assumptions: the ability of Somerset and Fluid to meet their respective revenue targets; the ability to achieve cost synergies; general industry and economic conditions; changes in Somerset's and Fluid's relationships with their customers and suppliers; pricing pressures and other competitive factors; and changes in regulatory requirements affecting the businesses of Somerset and Fluid. Fluid has also made certain macroeconomic and general industry assumptions in the preparation of such forward-looking statements. While Fluid considers these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect.
Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to: failure to satisfy the conditions of the offer; risks related to any inefficiencies with the structure of Somerset and/or Fluid, their respective tax treatments and any costs associated with reorganizing Somerset following closing; Fluid may not have sufficient funds to repay the convertible debentures issued in connection with the Offer in cash at maturity; general economic and business conditions; financing risk; risks inherent in the business of operating Somerset and Fluid, including the inability to attract and retain qualified employees; competition; disruptions in business operations; interest rate and foreign currency fluctuations; existing governmental regulations and changes in, or the failure to comply with, governmental regulations; and liability and other claims asserted against Somerset or Fluid. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. There can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, Fluid and/or Somerset. Forward-looking statements are given only as at the date hereof and both Fluid and Somerset disclaim any obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable laws.
SOURCE FLUID MUSIC CANADA, INC.
For further information: For further information: Fluid Music Canada, Inc., Lorne Abony, President & Chief Executive Officer, (310) 665-9878; Somerset Entertainment Income Fund, Andy Burgess, President & Chief Executive Officer, (416) 510-2800