EDMONTON, Aug. 14 /CNW/ - Insta-Rent Inc. (TSX-V:IRR) ("Insta-Rent" or the "Company") announced today that it has entered into a definitive agreement (the "Support Agreement") pursuant to which easyhome Ltd. ("easyhome") has agreed, subject to the terms of the Support Agreement, to make an offer to acquire all the outstanding Insta-Rent shares by way of a take-over bid (the "Offer") for $0.50 per share in cash, valuing the Company at approximately $10.2 million.
The Support Agreement provides for, among other things, customary board support and non-solicitation covenants (subject to customary "fiduciary out" provisions that entitle Insta-Rent to consider and accept a superior proposal). In the event a transaction is not completed, Insta-Rent has agreed to pay easyhome a termination fee of $365,000 in certain circumstances.
In connection with the Offer, all of the directors and certain other shareholders representing approximately 60% of the outstanding Insta-Rent shares (calculated on a fully-diluted basis) have entered into lock-up agreements with easyhome pursuant to which they have agreed to, among other things, tender all their Insta-Rent shares to the Offer.
The Insta-Rent Board of Directors, after receiving the recommendation of its special committee and legal advisors, has unanimously determined that the Offer is fair and in the best interest of the Insta-Rent shareholders and to recommend acceptance of the Offer. The Insta-Rent Board of Directors, has received an opinion from Paradigm Capital Inc. that the Offer is fair, from a financial point of view, to the shareholders of Insta-Rent.
Formal documentation relating to the take-over bid is expected to be mailed by easyhome on or about August 20, 2008. The Offer will be open for acceptance for a period of not less than 35 days and will be conditional upon, among other things, valid acceptances of the Offer by Insta-Rent shareholders owning not less than 66 2/3% of the outstanding Insta-Rent shares (calculated on a fully-diluted basis).
Cassels, Brock & Blackwell LLP is acting as legal counsel to Insta-Rent.
About Insta-Rent Inc.
Insta-Rent operates 50 stores across Canada under the Insta-Rent banner. Insta-Rent rents brand-name furniture, appliances, electronics and computers, with or without an option to purchase. Insta-rent operates primarily in The Brick and United Furniture Warehouse locations, which are part of The Brick Group, one of Canada's largest volume retailers of household furniture, mattresses, appliances and home electronics.
Insta-Rent employs more than 200 associates and is headquartered in Edmonton, Alberta.
About easyhome Ltd.
easyhome, with a total of 221 stores of which 208 are Canadian corporate stores, 8 are U.S. stores, 4 are franchised stores, and 1 is a licensed store as at June 30, 2008, is Canada's largest merchandise leasing company and the third largest in North America, offering top quality, brand-name household furnishings, appliances and home electronic products to consumers under weekly or monthly leasing agreements. easyhome is listed on the Toronto Stock Exchange under the symbol 'EH'.
INSTA-RENT SHAREHOLDERS ARE ADVISED TO READ INSTA-RENT'S DIRECTORS' CIRCULAR WHEN IT IS AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION.
CAUTIONARY NOTE REGARDING FORWARD LOOKING-STATEMENTS:
This press release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation, including but not limited to, statements about the Company's objectives and strategies, financial result expectations and outlook, whether for the Company's businesses or the Canadian economy. Generally, forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "planned", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, closing of transactions, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements, including but not limited to risks related to capital markets and additional funding requirements, fluctuating interest rates and general economic conditions, legislative and regulatory developments, the nature of our customers and rates of default, competition, loss of a material relationship, as well as those factors discussed in the Company's documents filed on SEDAR (www.sedar.com).
All material assumptions used in making forward-looking statements are based on management's knowledge of current business conditions and expectations of future business conditions and trends, including their knowledge of the current market within with they operate and other factors affecting the Company's products and the Canadian economy. Although the Company believes the assumptions used to make such statements are reasonable at this time and has attempted to identify in its continuous disclosure documents important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Certain material factors or assumptions are applied by the Company in making forward-looking statements, including without limitation, factors and assumptions regarding acceptance of its products in the marketplace, consumer purchasing trends, existing relationships as well as its operating cost structure and current legislation. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements that are contained herein, except in accordance with applicable securities laws. Further information on the Company is available at www.sedar.com.
This press release and the information contained herein does not constitute an offer of securities for sale in the United States.
The TSX Venture Exchange Inc. has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
%SEDAR: 00026758E