NORWALL GROUP INC. ANNOUNCES PROPOSED GOING PRIVATE TRANSACTION
21 Outubro 2010 - 5:55PM
PR Newswire (Canada)
BRAMPTON, ON, Oct. 21 /CNW/ -- BRAMPTON, ON, Oct. 21 /CNW/ -
Norwall Group Inc. (TSXV: NGI) ("Norwall" or the "Corporation")
announced today that it intends to seek shareholder approval for a
proposal to take the Corporation private. Norwall plans to effect
the going-private transaction by way of a share consolidation (the
"Consolidation") on the basis of one post-Consolidation common
share for every 3,739,155 common shares held immediately prior to
the Consolidation. Upon completion of the Consolidation, Patton
Wallcoverings, LLC ("Newco"), a Florida limited liability company
wholly-owned and controlled, directly or indirectly, by James J.
Patton, Norwall President and CEO, and Bruce Mitchell, a control
block shareholder of Norwall, will be the sole shareholder holding
at least one whole common share. (Messrs. Patton and Mitchell
collectively own 3,739,155 common shares, representing 52.4% of the
issued and outstanding Norwall shares). Shareholders who hold
fractional shares upon completion of the Consolidation
(collectively, "Minority Shareholders") will receive a cash payment
of $0.93 per pre-Consolidation common share on account of such
fractional shares. This cash payment represents a premium of
approximately 16% over the closing price of Norwall shares on
September 20, 2010 (being the last date on which Norwall shares
traded) and a 36.5% premium over the weighted average trading price
of the Norwall shares over the past 12 months. Concurrent with the
completion of the Consolidation, Norwall will apply to have its
common shares de-listed from the TSX Venture Exchange. It will also
apply to the securities regulatory authorities to cease to be a
reporting issuer in each province in which it is currently a
reporting issuer. A special meeting (the "Meeting") of Norwall's
shareholders has been called for December 3, 2010, at which time
shareholders will be asked to consider and, if deemed advisable,
approve the Consolidation. All shareholders of record as of
November 1, 2010 (the "Record Date") will be entitled to receive
notice of and to vote at the Meeting on the basis of one vote for
each common share held. In connection with the Meeting, Norwall
will distribute a management information circular and accompanying
materials on or about November 9, 2010 to all shareholders of
record as of the Record Date. Under the Business Corporations Act
(Ontario), the Consolidation requires the approval of two-thirds of
the votes cast by shareholders at the Meeting. Because the going
private transaction constitutes a "business combination" for the
purposes of Multilateral Instrument 61-101 Protection of Minority
Security Holders in Special Transactions ("MI 61-101"), the
Consolidation must also be approved by a simple majority of the
votes cast by minority shareholders at the Meeting. In this regard,
Norwall, Mr. Patton, Mr. Mitchell, Newco, Albeem B.V. and Lorraine
Ashton (personally as a shareholder of Norwall and in her capacity
as sole trustee ("Trustee") of the Richard Derek Arnold Ashton
Trust (the "Ashton Trust") and sole executrix and trustee ("Estate
Trustee") of the estate of the Late Richard Derek Arnold Ashton
(the "Estate")) have entered into a support agreement dated October
20, 2010, pursuant to which, among other things: -- Lorraine
Ashton, the Ashton Trust, the Estate and Albeem B.V. (collectively,
the "Ashton Shareholders") have agreed to vote their shares in
favour of the Consolidation. The Ashton Shareholders collectively
own 2,713,084 common shares, representing approximately 38% of the
issued and outstanding shares and approximately 80% of all shares
held by Minority Shareholders; and -- The Ashton Shareholders have
agreed, effective upon completion of the Consolidation, to dismiss
without costs the court proceedings (the "Ashton Litigation")
commenced before the Ontario Superior Court of Justice on June 18,
2010 against Norwall, Mr. Mitchell and certain of Norwall's current
and former directors and officers. (See Norwall's press release
dated June 1, 2010 for further details concerning the Ashton
Litigation. ) The Consolidation is exempt from the formal valuation
requirement of MI 61-101 because Norwall is not listed on a
"specified market" within the meaning of section 4.4(a) of MI
61-101. The board of directors of Norwall, with Mr. Patton as an
interested director abstaining and acting on the recommendation of
an independent committee of directors formed to consider the
Consolidation, has unanimously approved the Consolidation and
determined it to be in the best interests of Norwall and fair to
Minority Shareholders. The reasons for the board's recommendation
of the proposed transaction include: -- the Consolidation
represents a liquidity opportunity in the absence of a liquid
market for Norwall shares and in the face of a declining market for
wallpaper products; -- the value of the cash consideration and the
premium to the recent trading range of the Norwall shares; -- the
unanimous favourable recommendation of the independent committee;
-- the Consolidation will be subject to Minority Shareholder
approval under MI 61-101; -- the Consolidation, if approved, will
result in a full and final settlement of the Ashton Litigation; and
-- the absence of available strategic alternatives. In connection
with the going private transaction, Newco has provided Norwall with
a secured term loan (the "Newco Loan") in the principal amount of
$2.7 million, bearing interest at a rate of 6% per annum, which
funds will be used to make cash payments to Minority Shareholders
commencing upon closing of the Consolidation. The Newco Loan
constitutes a "related party transaction" for the purposes of MI
61-101 but is exempt from the formal valuation requirement because
Norwall is not listed on a "specified market" within the meaning of
section 5.5(b) of MI 61-101. It is also exempt from the minority
voting requirement by virtue of section 5.7(f) of MI 61-101, which
exempts related party loans that have no equity or voting component
and are made on commercial terms not less favourable to the issuer
than if the financing had been obtained from an arm's length
lender. About Norwall Norwall designs quality residential
wallpapers and borders and distributes them to specialty stores in
Canada and through its wholly-owned operating subsidiary, Patton
Wallcoverings, in the United States and in 52 countries worldwide.
Forward-looking Statements Certain statements included in this
release contain words such as "could", "expects", "expectations",
"may", "anticipates", "believes", "intends", "estimates" and
"plans" (and similar expressions) and constitute "forward-looking
statements" within the meaning of applicable securities law. These
statements are based on Norwall's current expectations, estimates,
forecasts and projections about the operating environment,
economies and markets in which Norwall and its subsidiaries
operate. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors which are difficult to
predict and may cause the actual results, performance or
achievements of Norwall, or outcomes or results, to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such
factors include, among others, such factors which are described in
Norwall's management's discussion and analysis of operations and
other filings with Canadian regulatory authorities. These
statements, although considered reasonable by Norwall at the date
of this press release, may prove to be inaccurate and consequently
Norwall's actual results could differ materially from its
expectations as set out or implied in this release. Unless
otherwise required by applicable securities laws, Norwall disclaims
any intention or obligation to update or revise any forward-looking
statements. The TSX Venture Exchange does not accept responsibility
for the adequacy or accuracy of this release. %SEDAR: 00002584E To
view this news release in HTML formatting, please use the following
URL:
http://www.newswire.ca/en/releases/archive/October2010/21/c4818.html
pJames J. Patton, President and Chief Executive Officer at (905)
791-2700, (a
href="mailto:jpatton@norwallgroup.com"jpatton@norwallgroup.com/a);
or Edward Diochon, Vice President of Finance at (905) 791-2700, (a
href="mailto:ediochon@norwallgroup.com"ediochon@norwallgroup.com/a)./p
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