Sasamat Capital Corporation Signs Arrangement Agreement
24 April 2006 - 10:30PM
PR Newswire (US)
VANCOUVER, British Columbia, April 24 /PRNewswire-FirstCall/ --
Sasamat Capital Corporation (OTC:SSALF) ("Sasamat") is pleased to
announce that it has entered into an arrangement agreement (the
"Arrangement") with KHD Humboldt Wedag International Ltd. ("KHD")
(NASDAQ:KHDH) providing for the acquisition by KHD of all of the
outstanding common shares of Sasamat (the "Sasamat Shares")
pursuant to a plan of arrangement. Sasamat will become a
wholly-owned subsidiary of KHD. KHD currently owns approximately
51% of the Sasamat Shares. The Arrangement is structured such that
Sasamat will amalgamate with a wholly owned subsidiary of KHD under
the Canada Business Corporations Act ("CBCA"). Shareholders of
Sasamat participating in the Arrangement will exchange their
Sasamat Shares for shares of KHD (the "KHD Shares") on the basis of
0.12 KHD Shares for each Sasamat Share held, subject to adjustment
based upon any change greater than 2% in the value of the KHD
Shares that may have occurred as of the last trading day prior to
the effective date of the Arrangement. The effective date of the
Arrangement is scheduled for May 25, 2006 (the "Effective Date").
The share exchange ratio reflects a purchase price of CDN$3.57 per
Sasamat Share and US$26.35 per KHD Share (being the closing price
on Nasdaq on April 20, 2006). The share exchange ratio will be
adjusted on the Effective Date by Sasamat and KHD, acting
reasonably, if the closing price of KHD's common shares on the day
prior to the Effective Date has changed more than 2% from the
closing price on April 20, 2006. The adjustment to the share
exchange ratio will be made in order to provide Sasamat
shareholders with an equivalent purchase price per Sasamat Share at
the purchase price of CDN$3.57 as reflected in the current share
exchange ratio. However, any adjustment in the share exchange ratio
is subject to a maximum adjustment of 20%. The Arrangement requires
court approval under the CBCA and shareholder approval by the
shareholders of Sasamat. The Arrangement is also subject to various
conditions customary for transactions of this type. Sasamat and KHD
applied to the Supreme Court of British Columbia on April 21, 2006
and obtained an interim order providing, among other things, for
the calling and holding of the special meeting of the shareholders
of Sasamat. The Arrangement is to be approved by two-thirds of the
votes cast by Sasamat shareholders and a majority of the votes cast
by the minority shareholders. Sasamat expects to hold its special
general meeting on May 23, 2006. The Arrangement is a "going
private transaction" and a "related party transaction" within the
meaning of Policy Q-27 of the Autorite des Marches Financiers
("Policy Q-27"). Policy Q-27 establishes rules which are intended
to ensure that transactions such as the Arrangement are both
substantively and procedurally fair to minority shareholders. In
compliance with Policy Q-27, Sasamat engaged an independent
valuator to prepare a valuation and fairness opinion, a summary of
which will be included in the management information circular of
Sasamat and a copy of which will be posted on SEDAR. The effective
purchase price of CDN$3.57 per share is within the ranges set out
in the valuation opinion and the valuation and fairness opinion
concluded that, as of the date of the opinion, the consideration
being offered is fair, from a financial point of view, to the
minority shareholders of Sasamat. Policy Q-27 also requires that
the Arrangement must be approved by a majority of the votes cast by
minority shareholders in respect of the resolution approving the
Arrangement. Accordingly, the Sasamat Shares held by KHD and its
subsidiaries will not be voted on the vote made by the minority
shareholders to approve the Arrangement. Michael Smith, President
of Sasamat, commented, "The Arrangement will give Shareholders of
Sasamat a liquid market within which to realize the value of their
common shares by exchanging their common shares which are not
currently listed on any stock exchange for common shares of KHD
which are listed on NASDAQ and which, therefore, have a greater
degree of liquidity. Furthermore it will allow shareholders to
participate in the future prospects of KHD. KHD has a significantly
larger market capitalization than Sasamat and operates a company
with significant business, operations, property and assets, and
strong financial performance and operating results." Further
information concerning the Arrangement will be contained in the
circular to be sent to our shareholders with the meeting material.
For further information please contact: Company's proxy
solicitation agent, Kingsdale Shareholder Services Inc. Toll free
(866) 381 4104 in North America or collect at (416) 867 2272
DATASOURCE: Sasamat Capital Corporation CONTACT: Kingsdale
Shareholder Services Inc., +1-866-381-4104, or +1-416-867-2272, for
Sasamat Capital Corporation
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