VANCOUVER, Jan. 12 /CNW/ - Maxam Opportunities Fund Limited Partnership and Maxam Opportunities Fund (International) Limited Partnership (collectively "Maxam") announced that they have increased the price for the offer to acquire, through an acquisition entity, C.A. Bancorp Inc. (TSX: BKP) to $1.45 per share in cash. The offer has been extended and will remain open until 4:00 p.m. (Vancouver time) on February 2, 2010, unless withdrawn or extended.
The increased offer price represents a premium of approximately 43.5 per cent over the volume weighted average trading price of C.A. Bancorp's common shares over the 30 trading days immediately prior to December 3, 2009, the day Maxam disclosed its intention to make the offer. The 43.5 per cent premium exceeds the premiums paid in recent similar unsolicited transactions involving Canadian corporations or trusts.
Maxam believes the increased offer is a full and fair offer. This increased offer should be even more attractive to C.A. Bancorp shareholders given the recent developments at C.A. Bancorp. Such developments include C.A. Bancorp's announcement on December 14, 2009 that it believed that the value of its investment in Everus Communications Inc. was materially less than the $3.7 million it had previously reported. Furthermore, on December 22, 2009, the C.A. Bancorp directors' circular disclosed that C.A. Bancorp intends to accelerate payment of management bonuses, amend the employment agreements of management to broaden the circumstances under which certain termination entitlements can be triggered, and to provide for the payment of additional management retention bonuses. Maxam believes such developments negatively impact the value of C.A. Bancorp common shares by over $0.10 per share.
In regards to the announcement relating to the diminished value of Everus, as recently as November 11, 2009, C.A. Bancorp reported that the value of its investment in Everus was $3.7 million, or $0.14 per share. In Maxam's take-over bid circular dated December 7, 2009, Maxam stated as one of its Reasons to Accept the Offer that the fair value of C.A. Bancorp's private equity investments were significantly below net book value. Only seven days after the date of Maxam's take-over bid circular, C.A. Bancorp provided direct support for Maxam's statement by announcing that 10% of the book value of C.A. Bancorp's private equity investments (as represented by Everus) was worth "materially less" than reported by C.A. Bancorp less than six weeks previously.
In addition, Maxam continues to believe that several of the most compelling reasons to accept the offer, as outlined in its take-over bid circular, are C.A. Bancorp's inability to execute its business model (primarily establishing funds and raising capital), the highly illiquid nature of its shares, and that holding companies trade at a discount. The C.A. Bancorp directors' circular does not provide arguments to refute any of these compelling reasons. For these reasons, Maxam believes C.A. Bancorp has limited value as a public company, and as a result, should be sold.
On January 5, 2010, and again on January 11, 2010, Maxam contacted C.A. Bancorp's financial advisor in an attempt to negotiate a mutually beneficial transaction with C.A. Bancorp, and Maxam stated its interest in making an increased offer on a "friendly" basis. The parties discussed Maxam joining the bidding process initiated by C.A. Bancorp and its financial advisor with third parties; however, the terms proposed by C.A. Bancorp and its financial advisor would have restricted Maxam's ability to make a bid directly to C.A. Bancorp shareholders. As a result, Maxam decided to take the increased offer directly to C.A. Bancorp shareholders.
C.A. Bancorp's January 11, 2010 press release states that it has received "expressions of interest" from a number of parties. Those expressions of interest are non-binding, and Maxam expects that such expressions of interest would be subject to due diligence conditions, including review of non-public information. Maxam's increased fully-financed, all-cash offer of $1.45 per share is not subject to the same condition.
Maxam's offer is not "extremely" conditional as represented in the C.A. Bancorp's directors' circular. All of the conditions to the offer are standard for an unsolicited take-over bid, except for the requirement that C.A. Bancorp have at least $9 million of cash resources at the expiry of the offer. Maxam believes this condition was necessary to discourage C.A. Bancorp from making another investment which could potentially further erode shareholder value.
Maxam expects to mail the notice of variation and extension to shareholders of C.A. Bancorp promptly. The notice of variation and extension will be available on SEDAR at www.sedar.com under C.A. Bancorp's profile.
Maxam strongly encourages shareholders of C.A. Bancorp to read the offer, take-over bid circular and notice of extension and variation, which contain the full terms and conditions of the offer as well as detailed instructions on how shareholders can tender their common shares to the offer. Questions regarding the offer and take-over bid circular and requests for assistance in depositing common shares under the offer should be directed to Georgeson Shareholder Communications Canada Inc., the Information Agent for the offer, at 1-866-725-6574.
This news release may contain statements that constitute "forward-looking information" or "forward-looking statements" (collectively "forward-looking information") within the meaning of applicable securities legislation. This forward-looking information is subject to numerous risks and uncertainties, certain of which are beyond Maxam's control, including, without limitation, uncertainty related to the completion of the offer to acquire C.A. Bancorp, the impact of legislative or regulatory developments, competition, global capital markets activity, changes in prevailing interest rates, currency exchange rates, inflation levels and general economic conditions. Actual results, performance or achievements may differ materially from those expressed in, or implied by this forward-looking information and, accordingly, no assurance can be given that any events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits that will derive therefrom.
Forward-looking information is based on the estimates and opinions of Maxam's management at the time the information is released and Maxam does not undertake any obligation to update publicly or to revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
Information in this news release concerning C.A. Bancorp is based entirely on publicly available sources and has not been independently verified by Maxam. Maxam assumes no responsibility for the accuracy or completeness of such information.
Note: All financial figures are in Canadian dollars unless noted otherwise.
SOURCE MAXAM OPPORTUNITIES FUND LP
For further information: For further information: Johnny Ciampi, Managing Partner, firstname.lastname@example.org, Tel: (604) 685-0201 (Ext. 103); Sean Morrison, Managing Partner, email@example.com, Tel: (604) 685-0201 (Ext.102)