TORONTO, Aug. 8, 2014 /CNW/ -
Commenting on the proposed transaction, Mr. Vinod Patel, Chairman and CEO of Northampton said, "I am very pleased with this cash offer for Northampton. If the Arrangement is completed, holders of Common Shares will receive a substantial cash premium to Northampton's market price and it will represent a liquidity event that will unlock value for all shareholders. I encourage all Northampton shareholders to vote in favour of this transaction."
About the Arrangement
The Arrangement must be approved by the Ontario Superior Court of Justice (Commercial List) and the affirmative vote of (i) 66 2/3% of Northampton shareholders with holders of Common Shares and Preference Shares voting as one class at the annual and special meeting of shareholders that is expected to be held on September 15, 2014 (the "Meeting"), (ii) 50% plus one vote of the votes cast by holders of Common Shares at the Meeting (excluding 3,922,550 Common Shares held by the Purchaser and Mr. Deepak Ruparell) and (ii) 50% plus one vote of the votes cast by holders of Preference Shares at the Meeting.
The completion of the Arrangement is subject to customary closing conditions, including the receipt of any required regulatory approvals.
The Arrangement Agreement also provides for, among other things, unanimous board support and non-solicitation covenants. In the event of a superior proposal arising, the board of directors of Northampton will, in certain specified circumstances, have the right to change its recommendation that shareholders vote in favour of the Arrangement but Northampton will not have a right to terminate the Arrangement Agreement.
Under the Arrangement, Northampton shareholders will receive cash payments of $1.40 per Common Share and $0.20 per Preference Share from the Purchaser. Outstanding stock options will be cancelled and the holders thereof will receive a cash payment from Northampton equal to the amount by which $1.40 exceeds the respective exercise price.
The $1.40 cash consideration for each Common Share of Northampton represents a 13.4% premium to the average closing trading price of the Common Shares of Northampton on the TSX Venture Exchange of $1.23 for the 20 trading days ended August 7, 2014 and a 55.6% premium to the average closing price of the Common Shares of Northampton on the TSX Venture Exchange of $0.90 for the 20 trading days ended on July 8, 2014 (the date prior to the initial news release announcing this proposed transaction on July 9, 2014).
The Purchaser intends to fund the cash purchase price from existing resources of Mr. Ruparell and affiliated entities of Mr. Ruparell. The Arrangement is not contingent on any financing condition.
The board of directors of Northampton has unanimously approved the Arrangement.