Business
Clarke Inc. Delivers Letter to the Board of Northern Frontier Corp.
HALIFAX , July 16, 2015 /CNW/ - Clarke Inc. ("Clarke" or the "Company") (TSX: CKI) delive...
About this update from Clarke Inc.
[{"type":"text","content":"\n\nHALIFAX, July 16, 2015 /CNW/ - Clarke Inc. (\"Clarke\" or the \"Company\") (TSX: CKI) delivered today a letter to Northern Frontier Corp. regarding its recently announced agreement to acquire the construction services division of Black Diamond Group Limited. A full copy of the letter is reproduced below.\n\n \n\n\n\n\nJuly 16, 2015\n\n\n\n\n\nNorthern Frontier Corp.400, 435-4th Avenue SWCalgary, AB  T2P 3A8\n\n\n\n\n\n\nAttention: \n\n\nChris Yellowega, President and CEODarin Coutu, Chair of Audit Committee\n\n\n\n\n\n\nRe: \n\n\nTransaction to Acquire Construction Services Division of Black Diamond Group Limited\n\n\n\n\n\nDear Sirs:\n\n\n\n\n\nAs you know, Clarke Inc. (\"Clarke\") is currently the largest shareholder of Northern Frontier Corp. (\"Northern Frontier\" or the \"Company\"). We were interested to learn of the Company's agreement, announced yesterday, to acquire the construction services division (the \"Construction Business\") of Black Diamond Group Limited (\"Black Diamond\").\n\n\n\n\n\nWe would like to congratulate management and the Board for sourcing and negotiating what appears to be an attractive and accretive transaction for Northern Frontier and its shareholders. We believe the transaction offers the Company the opportunity to enter a complementary business, improve the Construction Business' performance due to an expansion of its customer base and improved utilization of its assets and provide additional work to the NEC and possibly Central Water divisions within Northern Frontier.\n\n\n\n\n\nNotwithstanding the potential benefits associated with the acquisition of the Construction Business, we are troubled that the Company is issuing approximately 4.6 million shares or almost 20% of the Company at a price of $0.54 per share. Our concern is compounded by the fact that this almost 20% interest in the Company is being issued without the input of shareholders (i.e. a shareholder vote).\n\n\n\n\n\nWe believe the issuance of shares at $0.54 per share undervalues the Company and there is a better alternative for all shareholders. Clarke is prepared to subscribe for $2.4 million of shares of Northern Frontier (i.e. the value of the shares that Northern Frontier is issuing to Black Diamond as partial consideration for its sale of the Construction Business) at a subscription price of $0.62 ...