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Copi - Plan Of Arrangement To Be Proposed By Copi To Its Shareholders In Terms
Release Date: 11/10/2004 17:01:07 Code(s): CAN
COPI - PLAN OF ARRANGEMENT TO BE PROPOSED BY COPI TO ITS SHAREHOLDERS IN TERMS
OF THE CANADA BUSINESS CORPORATIONS ACT AND CAUTIONARY ANNOUNCEMENT
CANADIAN OVERSEAS PACKAGING INDUSTRIES LIMITED
(Incorporated in Canada)
JSE share code: CAN ISIN: CA13642P1018
(`COPI`)
ANNOUNCEMENT REGARDING A PLAN OF ARRANGEMENT TO BE PROPOSED BY CANADIAN
OVERSEAS PACKAGING INDUSTRIES LIMITED TO ITS SHAREHOLDERS IN TERMS OF THE
CANADA BUSINESS CORPORATIONS ACT AND CAUTIONARY ANNOUNCEMENT
1. Introduction
The Board of Directors of COPI announce that COPI intends to propose a
transaction whereby COPI will acquire all of the common shares held by its
minority shareholders (the `Minority Shareholders`), being all shareholders
other than members of the Kalmanson family and their associates (the
`Majority Shareholders`). The offer will be implemented by way of a Plan of
Arrangement pursuant to Section 192 of the Canada Business Corporations Act
(the `Plan of Arrangement`) between COPI and its shareholders.
2. The Plan of Arrangement and its Rationale
2.1 The Plan of Arrangement will provide for COPI to acquire all the
common shares held by the Minority Shareholders for a price of Cdn$
19.50 per common share payable in cash (the `Acquisition
Consideration`). The Acquisition Consideration represents:
2.1.1 a premium of 35% to the price of a COPI common share as
quoted on the JSE Securities Exchange South Africa (`JSE`)
on Friday 8 October 2004, being the last business day prior
to the date of this announcement (1) ; and
2.1.2 a premium of 40% to the weighted average traded price of a
COPI common share quoted on the JSE over the 12-month period
ended Friday 8 October 2004 (2).
2.2 The Plan of Arrangement will also provide for the cancellation of the
common shares so acquired by COPI and the delisting of the remaining
common shares held by the Majority Shareholders from the JSE and the
London Stock Exchange plc.
2.3 Certain of COPI`s Minority Shareholders have from time to time
indicated to the Board of Directors of COPI that the very low trading
volumes of the common shares have, over the years, seriously hindered
the marketability of their shares and they have asked the Board of
Directors to find a mechanism to facilitate the disposition of their
shares. Having considered various alternatives, the Board of Directors
intends to propose the Plan of Arrangement to facilitate the Minority
Shareholders` objective to dispose of their common shares because it
believes that there is no other practicable mechanism available.
3. Special Meeting of the Shareholders to consider the Plan of arrangement
3.1 COPI will, on or about Monday, 18 October 2004, make application to
the Court of Queen`s Bench of New Brunswick (the `Court`) for an order
(the `Interim Order`) convening a meeting of the shareholders at which
shareholders, entitled to vote at the meeting, will consider and vote
on the Plan of Arrangement. If the Plan of Arrangement is passed by
the requisite majority of shareholders as set out in paragraph 4.1
below, COPI will apply to the Court for a final order approving the
Plan (the `Final Order`) and will take all other steps necessary to
make it effective.
3.2 Subject to the Court granting the Interim Order and the approval of
the JSE, a circular containing full details of the Plan of Arrangement
will be posted to COPI shareholders on or about Friday 29 October
2004, with a view to the shareholders` meeting to approve the Plan of
Arrangement being held on or about Tuesday 30 November 2004.
4. Conditions precedent
The Plan of Arrangement is subject to the following conditions:
4.1 subject to any further order of the Court, the Plan of Arrangement
being approved by:
4.1.1 the affirmative vote of at least two thirds of the votes
cast by all shareholders, present in person or by proxy, at
the meeting, and
4.1.2 the affirmative vote of at least two thirds of the votes
cast by Minority Shareholders, present in person or by
proxy, at the meeting;
4.2 the Court sanctioning the Plan and issuing the Final Order;
4.3 the Director (appointed pursuant to section 260 of the Canada Business
Corporations Act) issuing a Certificate of Arrangement in respect of
the Plan of Arrangement; and
4.4 no action having been instituted by any shareholder or, if so
instituted be continuing on the date on which the Certificate of
Arrangement is issued by the Director to restrain the Plan of
Arrangement or no `cease trading` or similar order with respect to any
securities of COPI having become effective or threatened.
5. Financial Effects of the Plan of Arrangement
Minority Shareholders will receive the Acquisition Consideration of Cdn$
19.50 per common share. The Plan of Arrangement will have no other
financial effect on the Minority Shareholders, except for any applicable
tax effect.
6. Opinions and recommendations of directors
6.1 Special Committee
A Special Committee of the Board of Directors was established on 21
May 2004 to oversee the feasibility and preparation of the Plan of
Arrangement, including without limitation finalising the terms and
conditions of the Plan of Arrangement, appointing an independent
internationally recognised firm to assist in determining a fair and
reasonable cash consideration, supervising the preparation of the Plan
of Arrangement and related documentation, analysing the financial
options to ensure the availability of the funds required for COPI to
acquire all of the common shares to be acquired pursuant to the Plan
of Arrangement as well as counselling and guiding the Board of
Directors and management with respect to the Plan of Arrangement and
its implementation.
6.2 Opinions and recommendations
6.2.1 The Special Committee on behalf of the Board of Directors
has appointed KPMG Corporate Finance as the independent
financial advisor, and for the purposes of the JSE as the
independent financial expert, to COPI to provide an opinion
on whether the terms of the Plan of Arrangement are fair and
reasonable to Minority shareholders (the `Fair and
Reasonable Opinion`). The text of the Fair and Reasonable
Opinion will be disclosed in the circular referred to in 3.2
above.
6.2.2 The Board of Directors has approved the Plan of Arrangement
and authorised its submission to the Court and the
shareholders for their respective approvals. The Board of
Directors intends to recommend that shareholders vote in
favour of the Plan of Arrangement.
7. Expressions of Support
Based on statements of intention received, the Board of Directors believe
that the Majority Shareholders (which hold approximately 81.7% of the
common shares) will support the Plan of Arrangement and will vote in favour
thereof at the Court convened meeting. Additionally, each of the directors
of COPI intend to vote all common shares which they hold in favour of the
Plan of Arrangement.
8. Cautionary announcement
Shareholders are advised to exercise caution when dealing in their common
shares until the salient dates relating to the Plan of Arrangement are
published. It is expected that the salient dates will be published on SENS
and on the Regulatory Information Service of the LSE on Tuesday 26 October
2004 and in the press on Wednesday 27 October 2004.
Notes:
(1). Converting the quoted price of the common shares to Cdn$ at a rate of
Cdn$ 1.00: R5.25737
(2). Converting the average quoted price of the common shares to Cdn$ at a
rate of Cdn$ 1.00: R5.25737
11 October 2004
Montreal, Canada
JSE sponsor
Rand Merchant Bank Corporate Finance
A Division of FirstRand Bank Limited
Corporate advisors
Maitland
Independent financial Advisor
KPMG
Canadian legal advisors
LAVERY, DE BILLY
Barristers and Solicitors
and
PATTERSON PALMER
South African legal advisors
WEBBER WENTZEL BOWENS
