TORONTO, Feb. 18 /CNW/ - Neo Material Technologies Inc. (TSX: NEM) (the
"Company" or "Neo") announced today that the Toronto Stock Exchange ("TSX")
has informed the Company that, as is typical for shareholder rights plans
adopted while an issuer is aware of a specific take-over bid or proposed
take-over bid, it has deferred its approval of the Company's recently
announced new shareholder rights plan (the "New Plan") until the earlier of
(i) a decision by the appropriate Canadian securities commission regarding the
New Plan; and (ii) shareholder ratification of the New Plan.
The Company is not currently aware of any proceeding before any Canadian
securities commission regarding the New Plan. The Company will put the New
Plan before the Company's shareholders for ratification at its next
shareholder meeting, which is currently scheduled to take place on April 24,
The Board of Directors approved the adoption of the New Plan in direct
response to the announcement by Pala Investments Holdings Limited ("Pala") of
its intention to make a partial offer (the "Pala Partial Offer") to acquire up
to an additional 23 million outstanding common shares of the Company at a
price of $1.40 per share. The Pala Partial Offer would represent an
acquisition of an additional 20% of the common shares of Neo and, based on the
Company's information, if completed, would bring Pala's aggregate ownership to
approximately 40% of the outstanding common shares of Neo. The New Plan would
be applicable to the Pala Partial Offer as well as to similar unfair attempts
to make creeping takeovers of the Company and is in addition to the Company's
existing shareholder rights plan dated February 5, 2004 (the "Rights Plan").
The New Plan is substantially similar to the existing Rights Plan, except that
it requires that any take-over offer be made to all Neo shareholders for all
of their shares.
The purpose of the New Plan is to provide the Board of Directors with the
ability to prevent the acquisition of control of, or a creeping takeover bid
for, the Company by means of a partial bid. The New Plan requires that any
offer to acquire shares of the Company be made to all shareholders for all of
their shares to ensure that all shareholders of the Company are treated
equally and fairly in connection with any take-over bid for the Company. The
New Plan is being adopted to discourage discriminatory, coercive or unfair
attempts to take over the Company.
As indicated in the Company's February 12, 2009 press release, based on
preliminary consultation with financial and legal advisors the Company
believes that Pala's proposed offer significantly undervalues the Company and
ignores the Company's long-term earnings potential and ability to generate
free cash flow. In addition, the Company believes that the proposed offer is a
coercive attempt to acquire control of the Company without providing
shareholders with the control premium and liquidity that such an acquisition
would normally require.
In the event that Pala provides a formal offer to Neo's shareholders, the
Board of Directors will carefully review such offer together with its advisors
and provide its formal recommendation thereon together with the reasons for
such recommendation. The Board of Directors will also determine whether to
continue to defer the separation time under the New Plan at such time.
Copies of both the New Plan and the Rights Plan are available at
About Neo Material Technologies
Neo Material Technologies is a producer, processor and developer of
neodymium-iron-boron magnetic powders, rare earths and zirconium based
engineered materials and applications through its Magnequench and AMR
Performance Materials business divisions. These innovative products are
essential in many of today's high technology products. Magnequench's neo
powders are used to produce bonded magnets, generally used in micro motors,
precision motors, sensors and other applications requiring high levels of
magnetic strength, flexibility, small size and reduced weight. Rare earth and
zirconium applications include catalytic converters, computers, television
display panels, optical lenses, mobile phones and electronic chips. The
Company is headquartered in Toronto, Canada and has approximately 1,300
employees in 15 locations, across 10 countries.
For further information:
For further information: Michael Doolan, Chief Financial Officer, (416)
367-8588, ext. 335, Website: www.neomaterials.com, e-mail:
email@example.com; Ali Mahdavi, Investor Relations, (416) 962-3300, ext.
225, e-mail: firstname.lastname@example.org