Business News
VendTek adopts shareholder rights plan
Thursday 27. November 2008 - VendTek Systems Inc. (TSX-V: VSI) ("VendTek" or the "Company") today announced that its board of directors (the "Board") has adopted, subject to the TSX Venture Exchange acceptance, a shareholder rights plan (the "Plan").
The Plan is designed to provide adequate time for VendTek’s shareholders and its Board to consider and evaluate any unsolicited take-over bid for the Company, to provide the Board adequate time to identify, develop and negotiate alternatives for maximizing shareholder value, to provide shareholders with an equal opportunity to participate in any take-over bid, to encourage the fair treatment of shareholders in the event of any bid for the Company and to ensure that any proposed transaction is in the best interests of VendTek’s shareholders. The Plan is not being proposed in response to, or in contemplation of, any specific take-over bid for VendTek, and is not intended to, and will not, hinder full and fair offers for control of the Company that are made to all shareholders.
Martin Parent, Chairman of the Board, commented, “The board of directors has implemented this plan to ensure that the interests of all shareholders are served in a fair and equitable manner in the event of an unsolicited take-over bid for control of the Company. The Company remains focused on the creation of long-term, sustainable shareholder value through a combination of continued revenue growth and improved operating margins and asset realization and believes that the implementation of a shareholder rights plan is an important step in the value creation process.”
To implement the Plan, the Board has authorized the issuance of one right (a “Right”) in respect of each common share of the Company (a “Common Share”) outstanding at the close of business on November 26, 2008 (the “Record Time”), as well as one Right in respect of each Common Share issued after the Record Time. Initially, the Rights will attach to, trade with and be represented by Common Share certificates, including certificates issued prior to the Record Time. Until such time as the Rights separate from the Common Shares and become exercisable, the Right certificates will not be distributed to shareholders.
The Plan is similar to shareholder rights plans adopted by a number of other Canadian public companies. The Plan is not intended to block take-over bids and allows persons seeking control of the Company to make take-over bids within the “permitted bid” provisions of the Plan whereby, among other things: all shareholders are entitled to participate, the bid remains open for an initial period of at least 60 days and more than 50% of the Common Shares held by shareholders not involved in the bid (the “Independent Shareholders”) are tendered and not withdrawn during this period. Generally, if a take-over bid does not meet the permitted bid provisions of the Plan and an unsolicited bidder acquires or announces the intention to acquire beneficial ownership of Common Shares, which when aggregated with the person’s then current holdings, total 20% or more of the outstanding Common Shares, the Rights issued under the Plan will become exercisable. The Rights will entitle the Independent Shareholders to acquire Common Shares at a 50% discount to the then prevailing market price of the Common Shares.
Although the Plan is effective immediately, VendTek intends to submit the Plan to shareholders for confirmation at the Company’s next annual general meeting expected to be held in April 2009. If the Plan is not confirmed by shareholders, the Plan and all outstanding Rights will terminate and be void and have no further force and effect.