- Omnia's Cdn$0.20 per share proposal still provides the highest value to Nordex shareholders as compared to the existing proposed transaction
- The Nordex board continues to want to sell Nordex for values of between Cdn$0.12 and Cdn$0.18 per share while ignoring Omnia's higher Cdn$0.20 proposal, continuing a pattern of seeking the lowest deal for its shareholders
- Long suffering Nordex shareholders will receive the formal offer from Omnia as soon as possible and within two weeks, with the offer being open for 35 calendar days
Nordex shareholders need to vote against the inadequate EPC transactions to preserve their right to pursue the higher valued Omnia transaction
JOHANNESBURG, SOUTH AFRICA, July 20, 2016 /CNW/ - Omnia Holdings Limited ("Omnia") (JSE: Share code: OMN ISIN: ZAE000005153) today responds to numerous misleading statements made by Nordex Explosives Ltd. ("Nordex") in its press release of July 18, 2016.
Omnia through its mining division in the name of BME, a globally recognized business in the mining explosives industry, will make an all-cash offer (the "Offer") to purchase all of the outstanding common shares (the "Shares") of Nordex at Cdn$0.20 per Share. While initially expected to be open for 105 calendar days, Nordex's announcement of July 18, 2016 confirming that Nordex intends to effect an alternative transaction, means that under new Canadian take-over bid rules enacted in May 2016, the Omnia Offer need only be open for 35 calendar days from the date it is formally made, thus greatly speeding up the delivery of higher value to Nordex shareholders. Omnia will mail the Offer by the end of July, 2016.
Nordex made numerous misleading statements in its July 18, 2016 press release, which only have the effect of driving their shareholders into a lower valued transaction. In addition, Nordex mischaracterized the discussions with Omnia regarding a supported transaction, which Omnia would like to correct as follows:
- Omnia wished to contact Nordex's lenders, but at every turn was denied access or not provided contact information by Nordex's board and management despite being assured by Nordex management that contact information would be provided.
- BME has full approval from the Omnia board for its proposed Offer and had such approval for its earlier proposal to Nordex.
- Omnia proposed providing Nordex with an unsecured non-convertible loan in order to provide bridge financing and additional working capital to support Nordex through to completion of a transaction, which provided a clearer and faster regulatory path under TSX Venture Exchange rules.
- Nordex's requirement for a reverse break-fee was not customary and unneeded, whereas Omnia was willing to provide Nordex with a customary right to terminate the agreement and to pursue a "superior proposal" if it paid a break fee.
- The time required for the Omnia Offer to be open, which the Nordex board should have realized, is now reduced to 35 calendar days through its announcement of definitive agreements with Société Anonyme d'Explosifs et de Produits Chimiques ("EPC").
"Our entire prior proposal to the Nordex board was designed to provide it with much needed bridge financing and additional working capital to support Nordex through to completion of a transaction. Nevertheless, those terms are now history, and Nordex shareholders should focus on the terms of the forthcoming Offer, which will provide Nordex shareholders with the most value currently available," said Joseph Keenan, BME's Managing Director.
Nordex has also failed to disclose its definitive agreements with EPC. It is therefore impossible for a Nordex shareholder or Omnia to fully understand the terms and the conditions of the EPC transactions and to assess their conditionality in comparison to what the Omnia Offer proposes. Nordex shareholders should look at this with skepticism, and query why their board and management are withholding the full details of EPC transactions from them.
There remain numerous reasons for Nordex shareholders to accept the Omnia Offer when made, and to vote against or change their vote in respect of the proposed transactions with EPC.
In order for Nordex shareholders to have the opportunity to pursue the higher valued Omnia Offer, they must vote NO to the inferior EPC transactions at the Nordex shareholder meeting to be held on or about August 12, 2016. Instructions for Nordex shareholder on how to vote either in person or by proxy at the Nordex shareholder meeting to be held on or about August 12, 2016 will be found in the Nordex information circular when it is made available.
Reasons to accept the Offer when it is made and to NOT support the inadequate EPC transactions include:
- Significant Premium for Shareholders: The Cdn$0.20 cash Offer price Share continues to represent a 22% premium to the value offered to Nordex shareholders in the current EPC offer.
- Omnia will Benefit the Local Kirkland Lake Community. The Nordex business will not be leaving Kirkland Lake, Ontario. Omnia sees Nordex as the ideal base to grow its North American business, and has the financial means and capacity to ensure that the facility continues to provide jobs to the surrounding community for years to come and to make the necessary technical investment to improve the business.
- Realize Immediate and Certain Value: The all-cash consideration provides shareholders with the opportunity to realize an immediate and certain value for their Shares.
- The Offer Need only be Open for 35 Calendar Days. Nordex's July 18, 2016 announcement means that Nordex shareholders will only need to wait a few weeks to realize full value for their shares. The Offer now can be expected to able to be closed by late August or early September.
- Remove the opportunity for EPC to significantly dilute current Nordex shareholders. EPC's subscription at a subscription price of Cdn$0.12, through which it will come to own 66.6% of the Nordex shares, is opportunistic, undervalues Nordex and represents a 40% discount to the share price set out in the BME Offer.
- Fully-Financed All-Cash Offer: In accordance with applicable Canadian securities laws, the Offer will not be subject to a financing condition and made from cash on hand.
- Offer Provides Shareholders with Liquidity: Nordex shareholders currently have limited liquidity based on the trading history of the Nordex Shares, and the fully-funded Offer provides an opportunity for shareholders to dispose of all of their Shares for a clean cash consideration of Cdn$0.20 and at value levels not seen in the Nordex Share price since the first half of 2015.
- The Going Private Transaction with EPC Puts Nordex Shareholders at Risk. If the going private transaction with EPC is not completed, Nordex shareholders will have been diluted into a change of control transaction at an unconscionable Cdn$0.12 per share and will be left as minority holders in a controlled subsidiary of EPC with no means to realize full value for their shares.
- The Proposed Change of Control Private Placement to EPC is Highly Dilutive and Keeps Significant Value from the Nordex Shareholders. The proposed change of control private placement to EPC is highly dilutive at Cdn$0.12 per share, a full C$0.08 per share, which means Nordex's board is leaving Cdn$1.6 million of value on the table that is not going into the Nordex business, and in supporting EPC's Cdn$0.18 per share going private transaction keeps a further Cdn$400,000 away from Nordex shareholders.
Omnia trusts that the Nordex board will be mindful of its legal obligations, and not issue shares at Cdn$0.12, which is well below their fair market value as demonstrated by Omnia's proposed purchase price, and seek to support the Offer, which delivers the most value to Nordex shareholders.
Omnia remains open to discussing a supported transaction with Nordex. The Nordex board is permitted under its initial letter agreement of June 10, 2016 with EPC to terminate its transaction with EPC if the Nordex board does not support that deal. Omnia hopes the Nordex board will ultimately act in the best interest of its shareholders and work with Omnia to deliver the most value to Nordex shareholders, rather than continue to obstruct Omnia's delivery of the best deal at the highest price to Nordex shareholders.
Neither Omnia nor any of its affiliates owns any securities of Nordex, and Omnia is not directly or indirectly seeking the power to act as a proxyholder for any securityholder of Nordex.
Shareholders with questions may contact Omnia's information agent, Laurel Hill Advisory Group, toll-free at 1-877-452-7184 or outside North America at 1-416-304-0211 or by email at [email protected].
Omnia Holdings Limited is a diversified chemicals group, listed on the Johannesburg Stock Exchange with a market capitalization of R10.8 billion (Cdn$980 million), with specialised services and solutions for the agriculture, mining and chemicals industries. Group turnover for the financial year ended 31 March 2016 was R16.8 billion (Cdn$1.5 billion).
The Group differentiates itself from other commodity chemical providers by adding value at every stage of the supply and service chain through technological innovation and by deploying its intellectual capital. The sustainability of the business model is strengthened by targeted backward integration through the installation of technologically advanced plants that manufacture core materials such as nitric acid and explosives emulsions. In addition to securing sources of supply, this enables Omnia to improve operational efficiencies throughout the product development and production cycle.
Omnia, which has its roots in the fertilizer and agriculture industry, has built an in-depth understanding, not only of its core markets in South Africa, but also in the fundamental industries of mining and agriculture in Africa. Based in Johannesburg, South Africa and with operations in 18 countries in Africa, including South Africa, and five countries outside of Africa, Omnia has more than six decades' experience in the business. Additionally, Omnia continues to grow its global footprint, with business units in Australasia and Brazil and clients in other regions such as Europe, South America and South East Asia.
Omnia provides customised, knowledge-based solutions through its Agriculture, Mining and Chemicals divisions. These divisions include Omnia Fertilizer, BME, Protea Mining Chemicals and Protea Chemicals, all niche businesses that operate with a common objective: to enhance customers' businesses through research, development and knowledge sharing that will enable them to increase yields and by extension, profit margins. The Group's proven business model makes it a market leader in chemical services. Omnia continues to grow and prosper, offering value to its customers by tailoring its solutions to their business needs through product and service innovation, and through the expert application thereof.
For further information, please refer to the Omnia website at www.omnia.co.za.
The Mining division services the mining, quarrying and construction industries through BME and Protea Mining Chemicals. BME is a leading manufacturer and supplier of bulk explosives, related accessories and blasting services in South Africa, southern and West Africa, and Australia.
BME is a market leader in bulk emulsion and blended bulk explosives formulations for opencast mining. It produces electronic delay detonators and shocktube initiating systems, and has its own range of boosters. BME also manufactures packaged explosives for underground mining and specialised surface blasting operations. BME offers a world-class blasting consultancy service with a combination of leading edge proprietary technology and world class expertise.
Industry experts, experienced mining engineers and geologists advise and support customer operations, particularly in the use of BME's unique and proprietary BlastMap™ software solutions in conjunction with the accurate AXXIS® electronic delay detonators.
Having introduced the technology for cold emulsion explosives into South Africa over 30 years ago and being the first to introduce used oil in the manufacturing of bulk explosives, BME remains driven by innovation and technical ability. Alongside the continuous evolution of BME's explosives and related products, BME has developed the AXXIS® electronic delay detonators – now an industry standard with an easy-to-use interface – and the BlastMapIII™ software for blast design and planning. This innovative approach leverages cutting-edge knowledge within the business to create significant customer wealth through improved productivity.
SOURCE Omnia Holdings Limited
For further information: please refer to the BME website at www.bme.co.za. Joseph Keenan - Managing Director (BME - a division of Omnia Group (Pty) Ltd, Email: [email protected], Contact: +27 11 709 8973