TORONTO, June 18 /CNW/ - Jaguar Financial Inc. ("Jaguar" or the
"Offeror") (TSX: JFI) today announced that, as described in its Notice of
Change dated June 18, 2008, (the "Notice") Jaguar has waived the minimum
tender condition described in its Offer and Circular dated May 27, 2008, (the
"Original Offer", together with the Notice, the "Offer") to acquire up to
6,681,750 of the issued common shares ("Shares") of Telehop Communications
Inc. ("Telehop") at a cash price of $0.50 per share.
Jaguar has also updated information in the Original Offer and corrected
statements made by the directors of Telehop in the Directors' Circular of
Telehop dated June 11, 2008 (the "Telehop Response"). The expiry time for the
Offer is unchanged and the Offer will remain open for acceptance until 5:00 PM
on July 2, 2008.
Waiver of Minimum Tender Condition
The Offer is no longer conditional on a minimum number of Shares being
tendered to the Offer and not withdrawn. Subject to the satisfaction of all
other conditions contained in the Original Offer, Jaguar intends to take up
and pay for all Shares tendered and not withdrawn from the Offer. The Offeror
reserves the right to further amend the conditions to the Offer in accordance
with applicable laws.
Excessive Change of Control and Termination Provisions for Telehop's CEO
The Telehop Response discloses that its board has recently approved an
excessively generous employment contract for Hersh Spiegelman, CEO of Telehop.
The employment contract for Mr. Spiegelman provides for 24 months compensation
in the event of a change of control and 19.5 months compensation in the event
of his termination without cause. These change of control and termination
provisions represent a potential additional payment to Mr. Spiegelman of at
least $600,000, or approximately $0.05 per Share.
The Offeror reserves its right to challenge the legality of the
termination and change of control provisions in Mr. Spiegelman's employment
contract. The Offeror also reserves its right to hold the directors of Telehop
accountable for any payment made to Mr. Spiegelman pursuant to either of these
Cancellation of Proposed Telehop Dividend
As a result of Mr. Spiegelman's recently approved employment contract,
the Offeror no longer intends to cause Telehop to declare and pay a dividend
to holders of Shares. It is anticipated that, if the Offer is successful, one
or more of the change of control and termination provisions of Mr.
Spiegelman's employment contract will be triggered resulting in payments to
Mr. Spiegelman of at least $600,000. As a result of this proposed egregious
payment, the Offeror does not anticipate that Telehop will have adequate
working capital to pay a dividend to shareholders.
Vic Alboini, Chairman and Chief Executive Officer of Jaguar, stated: "We
are concerned that the Telehop Board has approved a minimum $600,000 change of
control payment to the CEO, presumably in response to our Offer, which
represents 9% of the market value of Telehop as of yesterday's closing price.
We believe this payment, if made, would be oppressive to the Telehop
Recent Resignations of Officers and Directors of Telehop
Jaguar notes that yet another director of Telehop, in this case, Maurice
Cohen, has resigned. Under Mr. Spiegelman as CEO there are now TEN directors
who have resigned: Maurice Cohen, Celia Denov, William Holt, John McCarthy,
Robert Stikeman, Stephen Abbott, Ruth Bartholomeusz, Bryan Ceresne, Barry
Dixon, and Lawrence Cyna.
In addition, with Mr. Spiegelman as CEO, Telehop has lost THREE Chief
Financial Officers: John Ng, Glenn Reinecke and Robert Violi, as well as its
President, Ruth Bartholomeusz.
Mr. Alboini noted: "This is clearly a deteriorating situation at Telehop
with a change of control obviously required to address shareholder value."
Recently Announced Third Party Proposal
Jaguar notes that Telehop today announced that it has received a letter
proposal respecting the purchase of all the outstanding Telehop shares at a
price of $0.80 per share from an arm's-length strategic industry participant.
The Telehop press release indicates that the letter proposal contains a number
of conditions. As the letter proposal described in Telehop's press release is
not sufficiently advanced, Jaguar will proceed with its Offer to acquire
control of Telehop and will respond to any other offer if, as and when such an
offer is made.
Copies of the Offer documents including the Notice are available on SEDAR
For further information about the offer, Telehop shareholders can contact
Northern Securities Inc., the dealer manager for the Offer, at 416 644-8100 or
toll free at 1-888-675-7602.
Jaguar is a Canadian merchant bank that invests in undervalued small
capitalization companies in a variety of industry sectors.
The Toronto Stock Exchange does not accept responsibility for the
adequacy or accuracy of this news release. This news release may contain
certain forward looking statements which involve known and unknown risks,
delays, and uncertainties not under Jaguar's control which may cause actual
results, performances or achievements of Jaguar to be materially different
from those implied by such forward looking statements.
This press release does not constitute an offer to purchase shares of
Telehop. Such an offer can only be made through an offer to purchase and
circular filed with applicable securities regulatory authorities. Jaguar urges
shareholders of Telehop to read the Offer documents, as they will contain
For further information:
For further information: on this press release, please contact: Kyler
Wells, General Counsel, (416) 644-8177