Business
MCO Capital Inc. Announces the Proposed Acquisition of IOU Central Inc.
MCO Capital Inc. Announces the Proposed Acquisition of IOU Central Inc.
About this update from Fountain Asset Corp.
[{"type":"text","content":"\n\n\n\nOct. 15, 2009 (Canada NewsWire Group) -- MONTREAL, Oct. 15 /CNW Telbec/ -- MCO Capital Inc. (\"MCO\" or the \"Company\") (NEX: MCO.H), IOU Central Inc. (\"IOU\"), a private company existing under the laws of Canada, and IOU shareholders have entered into a non-arm's length letter of intent (the \"LOI\") pursuant to which, subject to the completion of the Security Purchase Agreement, the MCO Offering and the Concurrent Offering (as defined hereinafter) (together the \"Conditions Precedent\"), MCO will acquire all of the outstanding common shares of IOU in an all-share transaction (the \"Acquisition\"), whereby IOU shareholders will receive 63 common shares of MCO for each common share of IOU (the \"Exchange Ratio\"). Based on the closing price of MCO's common shares on NEX of $0.10 on June 30, 2009, the Exchange Ratio implies a value for each IOU common share of $6.30.The Acquisition together with the Conditions Precedent is expected to constitute a non-arm's length Reverse Takeover of the Company (the \"RTO\") as defined in the policies of the TSX Venture Exchange (the \"TSXV\").Transaction detailsUnder the terms of the Acquisition, the IOU shareholders will receive 63 common shares of MCO for each common share of IOU held. This will result in MCO issuing approximately 33,538,932 common shares to IOU shareholders, representing a total consideration of $3,353,893 (the \"Consideration\"). The Consideration may be reviewed following further evaluation during the due diligence that may be carried out by the parties to the LOI or any other person designated by the parties to the LOI. In the event of a change in the Consideration, the number of MCO's common shares to be issued to the IOU shareholders shall be adjusted accordingly.Although MCO, IOU and IOU shareholders are bound by the LOI, they are to enter into a definitive share purchase agreement (the \"Agreement\") to complete the Acquisition. The parties will proceed in good faith to negotiate the terms and conditions of the Agreement as soon as possible, with a view to consummating the Acquisition on or before December 15, 2009 (the \"Termination Deadline\").The completion of the Acquisition is subject to the approval of the TSXV and all other necessary regulatory approval. The completion of the Acquisition is also subject to additional conditions precedent, including sh...