CALGARY, Oct. 10 /CNW/ - The Board of Directors of Pulse Data Inc.
("Pulse" or the "Company"), after reviewing and considering the October 9,
2007 amendment and extension to the offer by 6818862 Canada Inc., an indirect
wholly-owned subsidiary of Seitel, Inc., to purchase all of the common shares
of Pulse, continues to unanimously recommend that shareholders reject the
Seitel Offer. The Board further recommends that any shareholders who may have
tendered their Pulse shares to the Seitel Offer withdraw them.
In its press release of October 9, 2007, Seitel makes several incorrect
allegations that Pulse has attempted to mislead its shareholders with respect
to the Seitel Offer, and again states that the Seitel Offer is its "best and
final offer" - having already increased the offer once after making the same
ValueAct Capital, the parent company of Seitel, has further threatened to
sell its Pulse shares on the open market if the Seitel Offer is not
successful. In the view of the Pulse Board of Directors, this is a
scaremongering pressure tactic to coerce Pulse shareholders into accepting an
inadequate offer that they would otherwise reject. Shareholders must recognize
that Seitel and ValueAct Capital are acting solely in their own interests.
COERCIVE SCAREMONGERING BY VALUEACT AND SEITEL
ValueAct Capital and Seitel are attempting to coerce Pulse shareholders
into accepting the inadequate Seitel Offer. They are doing so in a number of
ways, including disseminating misleading claims that the Board and management
are not properly advising shareholders, making renewed threats that their
latest offer is the "best and final offer" (after having already increased
their offer once after having previously made the same claim) and threatening
that if the Seitel Offer is not "successful", ValueAct Capital intends to sell
all of its Pulse shares on the open market.
The latter threat seems inconsistent with their original stated purpose
of acquiring Pulse shares "for investment purposes". It appears aimed at
pressuring Pulse shareholders to accept the Seitel Offer out of fear that the
market price could drop precipitously were ValueAct Capital to sell its shares
abruptly. The Pulse Board does not believe that ValueAct Capital would act in
such a manner. Logic suggests ValueAct Capital and its investors would wish to
maximize their cash exit value if they decide to end their attempt to take
In any event, if ValueAct were to pursue that approach, the Pulse Board
believes it should be regarded as an attractive buying opportunity, given
Pulse's growth potential and its recently increased dividend to $0.20 per
share annually. In that regard, Pulse has verbally received preliminary
indications from a number of Pulse shareholders and other interested parties
expressing their interest in acquiring ValueAct Capital's Pulse shares should
ValueAct Capital be inclined to sell.
REFUSAL TO NEGOTIATE:
Seitel continues to make certain misleading statements with respect to
its attempts to negotiate with Pulse. Pulse's attempts to negotiate an
acceptable confidentiality agreement with Seitel were rejected by Seitel as
Seitel was not prepared to comply with the "permitted bid" requirements of
Pulse's Shareholder Rights Plan. The Plan, which was overwhelmingly approved
by Pulse's shareholders, would prevent Seitel from pursuing a creeping
Notwithstanding Seitel's rejection of the confidentiality agreement,
Pulse's advisers repeatedly informed Seitel that Pulse was prepared to enter
into negotiations without first agreeing to a confidentiality agreement. On
one occasion, Pulse proposed a price at which it was prepared to enter into
negotiations. Seitel has, to date, rejected each of these proposals to
SHAREHOLDERS NOT TENDERING:
Significant shareholders and the directors, officers and certain
consultants of Pulse, who collectively represent in excess of 50% of Pulse's
outstanding shares (fully diluted) have verbally restated in the last two days
that they do not intend to tender the Pulse shares owned or controlled by them
to the Seitel Offer. As a result, the Seitel Offer will not succeed unless
Seitel waives its minimum tender condition.
Q3 RESULTS UPDATE:
On September 21, 2007 Pulse reported that as of that date it had attained
cash data library sales for Q3, 2007 of $8.7 million, surpassing the previous
Q3 record for cash data library sales of $8.6 million, set in 2005. Pulse
reports that it finished the quarter with a record $9.1 million in cash data
library sales, and a total of $10.8 million in total seismic revenue, which
included partial delivery of a 3D seismic participation survey in the Deep
Basin area of west-central Alberta.
As at September 30, 2007, Pulse had a net debt position of $21.8 million,
consisting of a cash balance of $12.2 million offsetting the total long-term
debt balance of $34.0 million. This is a favourable improvement to the
December 31, 2006 net debt position of $37.5 million, consisting of
$2.5 million in cash offsetting the then long term debt balance of $40.0
ADDITIONAL REASONS FOR REJECTING THE SEITEL OFFER:
Pulse's directors and senior management are unanimous in the view that
Pulse's business plan of growing its seismic data library through strategic,
high-quality seismic data acquisitions and participation surveys offers
attractive growth potential and superior value for all shareholders to that
being offered under the Seitel Offer.
The Board reiterates its previously stated additional reasons for its
recommendation that shareholders reject the Seitel Offer. These additional
reasons are that the Seitel Offer:
- does not take into account Pulse's growth potential;
- does not offer a control premium over the value of the Pulse shares;
- does not reflect post-merger synergies;
- does not reflect Pulse's three consecutive quarters of growth and
- does not reflect Pulse's increased dividend;
- does not offer a significant premium to the market price; and
- is part of a creeping take-over strategy by Seitel.
UPDATE ON REVIEW OF STRATEGIC ALTERNATIVES
Following the mailing of Pulse's Notice of Change to its Directors'
Circular dated October 3, 2007, Pulse received verbal indications from a
potential strategic buyer indicating that such buyer was continuing to pursue
a possible acquisition transaction at a price level superior to that being
offered by Seitel. No assurance can be given that an acceptable proposal will
be received from such buyer or as to when a proposal, if any, may be received.
The Board of Directors of Pulse unanimously recommends that shareholders
reject the Seitel Offer and not tender their shares of Pulse to the Seitel
Offer. The Board further recommends that any shareholders who may have
tendered their Pulse shares to the Seitel Offer withdraw them. The Board's
decision is unanimously supported by Pulse's senior management team.
On or before October 12, 2007, Pulse will mail to the shareholders its
Notice of Change to the Directors' Circular responding to the Seitel Offer.
For shareholders contemplating tendering their shares, the Board of Directors
recommends that shareholders not make a decision on the Seitel Offer until
such time as they have received and considered the Directors' Circular.
Pulse continues to engage Georgeson Shareholder Communications Canada
Inc. to act as information agent with respect to the Seitel Offer, to assist
Pulse in informing shareholders as to the views of the Board of Directors with
respect to the Seitel Offer. Shareholders can contact Georgeson if they have
any questions regarding the Seitel Offer at:
Georgeson Shareholder Communications Canada Inc.
100 University Avenue
11th Floor, South Tower
North American Toll Free Number: 1-888-605-7616
DEFERRAL OF SEPARATION TIME:
Pulse also announces that the Board has deferred the Separation Time
under the Shareholder Rights Plan in respect of the Seitel Offer to
October 22, 2007.
Disclaimer: Certain information contained herein may constitute
forward-looking statements under applicable securities laws. Such statements
are subject to known or unknown risks and uncertainties that may cause actual
results to differ materially from those anticipated or implied in the
forward-looking statements. Investors are encouraged to review the "Risk
Factors" section of the Management's Discussion and Analysis in the Company's
most recent Annual Report and interim reports for a discussion of risks that
could affect the Company's operations and financial results. Forward-looking
statements are based upon management's assumptions, expectations and estimates
at the time that such statements are made. Pulse does not update
forward-looking statements should circumstances change or management's
assumptions, expectations or estimates change, unless required by law.
For further information:
For further information: Douglas Cutts, President and C.E.O., Tel: (403)
237-5559, Toll-free: 1-877-460-5559, E-mail: email@example.com; Please
visit our website at www.pulsedatainc.com