Unique Broadband Systems, Inc. Receives Dolgonos' Partial Offer and Urges No Action By Shareholders
Feb 03, 2012, 10:46 ET
TORONTO, Feb. 3, 2012 /CNW/ - Unique Broadband Systems, Inc. ("UBS" or the "Company") (TSX Venture: UBS) announces that it has now received from 2064818 Ontario Inc., a company controlled by Mr. Alex Dolgonos, the formal, unsolicited partial take-over bid offer for 10,000,000 common shares, representing only 10% of the Company's issued and outstanding common shares, for $0.08 per share. The stated purpose of the offer is to acquire a sufficient number of shares to replace the current board of directors.
The board of directors of UBS is in the process of assessing the offer with its advisors. UBS urges its shareholders not to respond to the offer pending the full review by the board of directors and further communications to shareholders.
The Company commenced proceedings under the Companies' Creditors Arrangement Act ("CCAA") in July 2011 and under these proceedings, Mr. Dolgonos recently sought to remove and replace Messrs. Grant McCutcheon and Henry Eaton as directors of UBS. The judgement of the Ontario Superior Court denying Mr. Dolgonos' motion to remove and replace Messrs. McCutcheon and Eaton did not take this partial take-over bid into consideration. UBS is considering its obligations under the CCAA in connection with the offer and may seek advice and directions from the court.
Mr. Dolgonos has indicated that the Company is on the "wrong course". UBS reminds shareholders that the course that the Company is currently pursuing includes:
- defending the Company against the claims made by Alex Dolgonos, through his company DOL Technologies Inc. ("DOL"), and by Gerald McGoey, the former CEO and Chairman of the Company, through his company Jolian Investments Inc. ("Jolian"), seeking that UBS pay (i) approximately $14 million allegedly arising from the terms of their respective consulting agreements with UBS and the change in the board after shareholders removed the former directors on July 5, 2010, (ii) approximately $2.5 million in respect of the deferred bonus awards, and (iii) approximately $1 million in respect of share appreciation rights cancellation and deferred bonus payments approved in 2009 using an assumed $0.40 share price to value them when the Company's shares were trading at approximately $0.16. UBS denies those monies are owing;
- supporting and assisting Look Communications Inc. ("Look"), in which the Company holds a 40% economic interest, in the claims brought by Look to recover approximately $20 million of awards paid by Look in 2009, including approximately $3.9 million paid to DOL and approximately $5.6 million paid to Jolian; and
- developing and pursuing a plan of reorganization for the Company that is in the best interests of all of the Company's creditors and shareholders through proceedings under the CCAA, including instituting an expedited process to determine the validity and quantum of the claims by DOL and Jolian discussed above and that are disputed by UBS.
It is the preliminary view of the board of directors of UBS that the offer by Mr. Dolgonos is opportunistic and is likely being pursued to seek control, directly or indirectly, of the various claims being asserted against Messrs. Dolgonos and McGoey and their affiliates and to influence the CCAA proceedings for the purpose of resolving all such claims and proceedings in their favour.
The current expiry date of the offer is March 9, 2012. This is the minimum time allowed under Canadian take-over rules.
About Unique Broadband Systems, Inc.
UBS's shares are listed on the TSX Venture Exchange under the symbols "UBS". More information on UBS can be found at www.sedar.com.
The corporate information contained in this release includes forward-looking statements regarding future events and costs that involve risks and uncertainties that could cause actual results to differ materially. Assumptions used in the preparation of such information, although considered reasonable by UBS at the time of preparation, may prove to be incorrect. The actual results achieved may vary from the information provided herein and the variations may be material. Consequently, there is no representation by UBS that actual results achieved will be the same in whole or in part as those forecast.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For further information:
Grant McCutcheon, CEO
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