Cantronic Systems Inc. Announces Change of Date for Meeting to Approve Going-Private Transaction
VANCOUVER, BRITISH COLUMBIA, Dec 19, 2012 (Menafn - Marketwire via COMTEX) --Further to its news release of November 30, 2012, Cantronic Systems Inc. ("Cantronic" or the "Company") wishes to announce that its annual and special meeting has been rescheduled to Tuesday, January 15, 2013 at 4:30 p.m. (Pacific time) (the "Meeting"). In addition to the usual annual business, the Company's shareholders ("Shareholders") and optionholders ("Optionholders") will be asked to consider, and if thought fit approve a special resolution in respect of the Company's proposed going-private transaction (the "Going-Private Transaction") pursuant to a statutory plan of arrangement (the "Arrangement") under Division 5 of Part 9 of the Business Corporations Act (British Columbia).
The Arrangement involves, among other things, the consolidation (the "Consolidation") of the Company's issued and outstanding common shares (the "Common Shares") on the basis of one post-Consolidation common share for every 1,600,000 Common Shares issued and outstanding, as well as the cancellation of all stock options. After giving effect to the Consolidation, each holder of pre-Consolidation Common Shares who holds less than one post-Consolidation Common Share ("Fractional Holders") will be paid, in lieu of any fractional post-Consolidation Common Share, 0.040 in cash by the Company in exchange for each pre-Consolidation Common Share held by them (the "Fractional Consideration") and such Fractional Holder will cease to be the holder thereof or have any rights as a holder in respect of such Common Shares other than the right to be paid by the Company the Fractional Consideration for such Common Shares and the name of the holder thereof will be removed from the central securities register of the Company with respect to such Common Shares. Fractional post-Consolidation Common Shares, rounded to the nearest 0.0001th of a Common Share, will be issued to Common Shareholders who hold more than one whole post-Consolidation Common Share, with the result that following the Consolidation, the Company will have a small number of holders of at least one whole Common Share, including James Zahn, and fewer than 51 securityholders in Canada in total (including holders of convertible debentures currently issued and outstanding). Following completion of the Arrangement, Cantronic will seek to have the post-Consolidation Common Shares delisted from the TSX Venture Exchange (the "TSXV") and it will also apply to the applicable Canadian securities regulatory authorities to cease to be a reporting issuer in each province in which it is currently a reporting issuer.
The 0.04 price per pre-Consolidation Common Share represents a 99.1% premium to the weighted average trading price of the Common Shares in the 10 trading days prior to November 21, 2012 (0.02), a 50.7% premium to the weighted average trading price of the Common Shares in the 30 trading days prior to November 21, 2012 (0.027), as well as a 30.3% premium to the weighted average trading price of the Common Shares in the 90 trading days prior to November 21, 2012 (0.031).
The Going-Private Transaction was considered by an independent special committee of the board of directors composed of John J.Y. Shen and Keith Attoe (the "Special Committee"). The Special Committee engaged Evans & Evans, Inc. ("Evans"), an independent financial advisor, to prepare a fairness opinion with respect to the Transaction (the "Fairness Opinion"). Subject to the qualifications, restrictions and assumptions set forth in the Fairness Opinion, in the opinion of Evans, as at November 22, 2012, the terms of the Transaction are fair, from a financial point of view, to the minority shareholders of the Company (the "Minority Shareholders").
After consideration of all of the circumstances, the Special Committee concluded that the Going-Private Transaction in the best interests of the Company and fair to the Minority Shareholders. Accordingly, the Special Committee recommended that the Board resolve to agree to the terms expressed in the Going-Private Transaction and to implement the proposed transaction by way of the Arrangement, subject to the receipt of all required shareholder and regulatory approvals.
On December 12, 2012, the Company obtained an interim order from the Supreme Court of British Columbia (the "Court") authorizing the Company to, among other things, convene the Meeting. The completion of the Arrangement remains subject to a number of conditions including, but not limited to, receipt of all regulatory, Court and shareholder approvals, including the approval of the Arrangement by: (a) a majority of not less than two-thirds of the votes cast in person or by proxy at the Meeting by Shareholders and Optionholders voting together as a single class and entitled to vote on the Arrangement; and (b) a majority of the votes cast by Shareholders, excluding James Zahn and his "related parties" (as defined in Multilateral Instrument 61-101) and any person or company acting jointly or in concert with him or them.
Further details regarding the Arrangement will be provided in a management information circular dated December 12, 2012, which is being mailed to the Company's securityholders in connection with the Arrangement and is to be filed on SEDAR.
On behalf of the Board of Directors of CANTRONIC SYSTEMS INC.
James Zahn, Chief Executive Officer
FOR FURTHER INFORMATION PLEASE CONTACT: Cantronic Systems Inc. James Zahn Chief Executive Officer (604) 516-6667, extension 228 jzahn@cantronics.com
SOURCE: Cantronic Systems Inc.
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