Teknion Corporation Agrees to be Acquired by its Controlling Shareholder
24 December 2007 - 11:00PM
Marketwired
TORONTO, ONTARIO ("Teknion") today announced that it has entered
into an agreement with 2158436 Ontario Limited ("2158436"), an
affiliate of Teknion's controlling shareholder, A-Tean Holdings
Limited ("A-Tean"), pursuant to which 2158436 has agreed to acquire
all of the subordinate voting shares (the "Shares") of Teknion not
owned by A-Tean and its affiliates for a price of $3.15 cash per
Share (the "Transaction"). The cash purchase price represents a
120% premium over the 30 day volume weighted average trading price
of the Shares at December 21, 2007, the last trading day prior to
the announcement.
A-Tean and its affiliates own approximately 62% of the issued
and outstanding shares of Teknion. In addition, Teknion has been
advised that 2158436 has entered into agreements with certain
institutions holding approximately 38% of the outstanding Shares,
pursuant to which those shareholders have committed to support the
Transaction.
A special committee of independent directors of Teknion,
consisting of Allen Karp, David Sanchez and George Taylor (the
"Special Committee"), each of whom is independent of A-Tean and its
affiliates and of management of Teknion, has reviewed the
Transaction with its independent legal and financial advisors. In
this regard, the Special Committee has received a valuation report
and an opinion from TD Securities Inc. that the consideration under
the offer is fair, from a financial point of view, to the holders
of the Shares other than A-Tean and its affiliated entities. The
Board of Directors of Teknion (other than directors affiliated with
A-Tean), upon the recommendation of the Special Committee, has
unanimously approved the Transaction and recommends that
shareholders vote in favour of the Transaction.
Teknion's Board of Directors has agreed that it will not solicit
alternative or competing offers, provided that it may consider any
superior proposals in accordance with its fiduciary duties.
It is intended that the form of the Transaction will be through
either an amalgamation of Teknion with 2158436 or by way of a plan
of arrangement under which each subordinate voting shareholder of
Teknion, other than 2158436 and its affiliated entities, will
receive $3.15 in cash for each Share held. Shareholders will be
asked to approve the Transaction at a special meeting of
shareholders (the "Meeting") expected to be held in the first
quarter of 2008.
The Transaction is subject to the completion of definitive
documentation as well as other customary conditions including, but
not limited to, the approval of not less than two-thirds of the
shareholders of Teknion voting at the Meeting and a majority of the
minority shareholders of Teknion voting at the Meeting, the receipt
of all required regulatory approvals and there being no material
adverse change with respect to Teknion.
It is expected that a management information circular relating
to the Meeting, containing the terms of the Transaction, will be
mailed to Teknion's shareholders by no later than January 31, 2008
and, assuming the satisfaction of all conditions, the Transaction
is expected to close no later than April 15, 2008. However, there
can be no assurances that the Transaction, or any other transaction
with Teknion's controlling shareholder, will be completed.
Forward-Looking Statements
Certain of the above statements are forward-looking statements
with respect to the Company's future prospects. These statements
involve risks and uncertainties that could cause the Company's
financial results to differ materially from stated expectations as
a consequence of a number of factors, including but not limited to:
fluctuations in the Company's operating results due to product
demand arising from competitive and general economic and business
conditions in the Company's North American and international
markets and operations; significant fluctuations in exchange rates
for currencies in which the Company does business; changes in the
cost of raw materials; the ability to maintain the proprietary
nature of the Company's intellectual property in the design and
manufacturing of its products; changes in the size and timing of
customers' order patterns; changes in the Company's markets,
including technology change, changes in customer requirements,
frequent new product introductions by competitors and emerging
standards; the Company's dependence on key personnel; the Company's
dependence on key commitments from significant dealers and
distributors; potential liabilities arising from product defects;
environmental matters and other factors set forth in the Company's
reports and filings with Canadian securities regulators. The
Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
Teknion Corporation (TSX: TKN) is a leading international
designer, manufacturer and marketer of office systems and related
office furniture products. Teknion's headquarters are located in
Toronto, Ontario. The company has offices and facilities in Canada,
the United States, the United Kingdom and the Pacific Rim, and
serves clients through a network of authorized dealers worldwide.
Visit Teknion at www.teknion.com.
Contacts: Teknion Corporation Steven E. Cohen Senior Vice
President, Corporate Development (416) 661-1577, ext. 2456 Teknion
Corporation Scott E. Bond Senior Vice President, Chief Financial
Officer & Secretary (416) 661-1577, ext. 2391 Website:
www.teknion.com
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