HALIFAX, Aug. 24, 2011 /CNW/ - Clarke Inc. ("Clarke" or the "Corporation") (TSX: CKI CKI.DB CKI.DB.A) today announced a substantial issuer bid (the "Offer") pursuant to which the Corporation will offer to purchase for cancellation up to 3,000,000 of the issued and outstanding common shares ("Common Shares") of the Corporation from shareholders (the "Shareholders") at the purchase price of $5.00 per Common Share (the "Purchase Price").
If more than 3,000,000 Common Shares are properly tendered to the Offer, the Corporation will take-up and pay for at the Purchase Price the deposited Common Shares on a pro-rata basis according to the number of Common Shares deposited (or deemed to be deposited) by the Shareholders (with adjustments to avoid the purchase of fractional Common Shares). The Corporation has reserved the right to at any time and from time to time to amend its offer to increase or decrease the maximum number of Common Shares the Company may purchase pursuant to the Offer. The Offer is not conditional on any minimum number of Common Shares being deposited, other than the Locked-Up Shares (as defined below). The Corporation will fund any purchases of the Common Shares pursuant to the Offer from cash available on hand and available credit facilities.
As of August 23, 2011, there were 20,034,809 Common Shares issued and outstanding, and accordingly, the Offer is for up to approximately 14.97% of the total number of issued and outstanding Common Shares. The Offer is subject to various conditions typical of transactions of this nature. It is anticipated that the offer to purchase and issuer bid circular and other related documents (the "Offer Documents"), containing the terms of the Offer and the instructions for tendering the Common Shares will be mailed to Shareholders and filed with applicable securities regulators on or about August 26, 2011. The Offer will remain open for acceptance for at least 35 days after the date of commencement, unless withdrawn or extended by the Corporation.
Sea Spruce Investments Limited ("SSI"), 3140871 Nova Scotia Limited ("314"), Hugh Smith ("Smith"), Scotia Learning Centres Incorporated ("SLC") and Geosam Investments Limited ("GIL") have each agreed, pursuant to lock-up agreements with the Company, dated August 23, 2011, to tender Common Shares (the "Locked-Up Shares") to the Offer. Under the terms of the lock-up agreements with SSI, 314 and Smith, 900,000 Locked-Up Shares will be tendered to the Offer. In addition, SLC has agreed to tender at least 560,000 Common Shares to the Offer and SLC and GIL have agreed to tender such additional number of Common Shares to the Offer as is necessary such that, following the completion of the Issuer Bid, SLC, GIL and such other persons identified by GIL will collectively own not more than, but as close as possible to, 49.9% of the Common Shares on the Payment Date. The purpose of SLC and GIL tendering is this manner is to avoid the Offer causing an acquisition of control of Clarke for tax purposes, which could have adverse income tax consequences to Clarke.
National Bank Financial Inc. ("NBF") was engaged by the Board of Directors of Clarke to prepare a liquidity opinion with respect to the Common Shares (the "Opinion"). A copy of the Opinion of NBF will be attached to the Offer Documents.
The directors of the Corporation believe that the purchase of Common Shares under the Offer represents an effective use of the Corporation's financial resources and is in the best interests of its Shareholders as the recent trading price range of the Common Shares is not fully reflective of the value of the Corporation's business and future prospects.
In accordance with applicable Canadian securities laws, Clarke will suspend purchases of its 6.0% convertible unsecured subordinated debentures due December 31, 2012 (the "2012 Debentures") pursuant to its normal course issuer bid announced on December 10, 2010 until after the Expiration Date or date of termination of the Offer. During the year, Clarke has redeemed an aggregate principal amount of $18,275,000 of the 2012 Debentures.
Clarke has completed purchases of an aggregate principal amount of $6,903,000 of its 6.0% convertible unsecured subordinated debentures due December 31, 2013 (the "2013 Debentures") pursuant to its normal course issuer bid announced on April 12, 2011.
In addition, neither the Corporation nor its Board of Directors makes any recommendation to Shareholders as to whether to tender or refrain from tendering their Common Shares to the Offer. Shareholders are strongly encouraged to review the Offer Documents carefully and to consult with their financial and tax advisors prior to making any decision with respect to the Offer.
About Clarke
Halifax-based Clarke Inc. invests in undervalued businesses and participates actively where necessary to enhance performance and increase return. Clarke's securities trade on the Toronto Stock Exchange (CKI, CKI.DB; CKI.DB.A); for more information about Clarke Inc., please visit our website at www.clarkeinc.com.
Forward-Looking Statements
This press release may contain or refer to certain forward-looking statements relating, but not limited to, Clarke's expectations, intentions, plans and beliefs with respect to Clarke. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "does not expect", "is expected", "budget", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or equivalents or variations, including negative variations, of such words and phrases, or state that certain actions, events or results, "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved. These forward-looking statements include, but are not limited to, statements regarding: the trading price of the Common Shares not fully reflecting the value of the Company's business and future prospects.
Forward-looking statements rely on certain underlying assumptions that, if not realized, can result in such forward-looking statements not being achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of Clarke to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. Risks and uncertainties include, among others, the Company's investment strategy, legal and regulatory risks, general market risk, potential lack of diversification in the Company's investments, and interest rates and foreign currency fluctuations. Although Clarke has attempted to identify important factors that could cause actual actions, events or results or cause actions, events or results not to be estimated or intended, there can be no assurance that forward-looking statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Other than as required by applicable Canadian securities laws, Clarke does not update or revise any such forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events. Accordingly, readers should not place undue reliance on forward-looking statements.