EDMONTON, Jan. 11, 2012 /CNW/ - Raydan Manufacturing Inc ("Raydan") (TSX-V: RDN) announced today that it has received an offer from 811332 Alberta Ltd, or its nominee ("811"), to acquire all of the issued and outstanding common shares (the "Shares") of Raydan by way of a statutory Plan of Arrangement pursuant to Section 193 of the Business Corporations Act (Alberta) (the "811 Offer"). The 811 Offer is a non-solicited offer under the terms of the Arrangement Agreement entered into between Raydan and Link Suspensions of Canada, Limited Partnership and Link Manufacturing Ltd (collectively, "Link") dated November 29, 2011 (the "Arrangement Agreement"). The total consideration payable by 811 under the 811 Offer is approximately $1.96 million, equivalent to $0.12 per Share of Raydan. Under the 811 Offer, holders of Shares would receive $0.12 per Share in cash directly from 811 or through a mutually agreed upon depositary on the completion of the transaction.
Raydan's Board of Directors has unanimously determined that the 811 Offer is a superior proposal within the meaning of the Arrangement Agreement and that 811 has the financial ability to execute the transaction.
"After carefully weighing the alternatives, in consultation with our legal and financial advisors, the Board of Directors has concluded that the 811 Offer provides greater shareholder value than Link's existing offer," said Ray English, President and Chief Executive Officer of Raydan.
On November 29, 2011, Raydan entered into the Arrangement Agreement with Link, whereby Link agreed to purchase all or substantially all of the assets of Raydan. Upon completion of the transaction, holders of Shares would receive approximately $0.07 immediately after the effective date and approximately $0.04 on or before 365 days from the effective date (as provided for under the Arrangement Agreement) or such later date as permitted under s.2.1(h) of the Arrangement Agreement. Link now has five (5) business days from January 9, 2012, during which it may choose to make a proposal which it believes would cause the 811 Offer to no longer constitute a superior proposal (a "Matching Proposal"). Alternatively, Link can terminate the Arrangement Agreement and receive the $160,000 termination fee under the terms of the Arrangement Agreement.
If accepted, the 811 Offer will be subject to a number of conditions, including: (a) approval of the Alberta Court of Queen's Bench; (b) approval by the holders of at least 66 2/3% of the votes cast by holders of Shares present in person or by proxy at a special meeting of holders of Shares; (c) completion of a definitive arrangement agreement; (d) execution of employment agreements for a three (3) year term by each of Ray English, Dan English and Chris English; and (e) certain other customary conditions. The 811 Offer is not conditional on financing. Pursuant to s.6.2 of the Arrangement Agreement, and due to Link receiving notice of a Superior Proposal (the "Notice") less than five (5) business days prior to the January 13, 2012, shareholder meeting ("Raydan Meeting"), Raydan shall adjourn the Raydan Meeting to a date not less than five (5) business days and not more than ten (10) business days after the date of Link's receipt of the Notice.
About 811332 Alberta Ltd
811 is an Alberta corporation owned 100% by Mr Bill Kocken. 811 has owned a large heavy industrial fabrication facility in southeast Edmonton since 2000. Bill Kocken is a current shareholder of Raydan and has management experience in the metal and steel fabrication industry dating back to 1989.
About Raydan Manufacturing Inc
Raydan Manufacturing Inc., based in Edmonton, Alberta, develops and produces specialized suspension and coupling systems for trucks, trailers and heavy equipment. Installations are completed at the Company's chassis modification centre in either Alberta or Ontario. Established in 1992, Raydan exports its innovative, high-quality products to end-users and original equipment manufacturers (OEMs) in the heavy-duty truck, truck crane, fire/rescue and other severe use sectors around the world.
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This news release contains forward-looking statements that involve risks and uncertainties, which may cause actual results to differ materially from the statements made. Potentially, many factors could cause our actual results to vary materially from those described herein as intended, planned, anticipated or expected. Raydan Manufacturing Inc. does not intend and does not assume any obligation to update these forward-looking statements.
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