CANEXUS CORP 6.5 PCT DEBS T.CUS.DB.D

The Merger with SPB May Not Go Through

[pierrelebel]

https://web.tmxmoney.com/article.php?newsid=7974839635055205&qm_symbol=SPB

This explains the share price weakness last week and this morning

[pierrelebel]

From the original announcement lasy year: 'The Arrangement Agreement provides for the payment by Canexus of a $25 million termination fee if the Arrangement Agreement is terminated in certain specified circumstances and for the payment by Superior of a reverse termination fee of $25 million if the Arrangement Agreement is terminated in certain specified circumstances." How will this

[Fearspect]

That was likely the penalty if either side pulled out, this is a regulatory issue.

[Kherson]

There is a little more to the proposed deal being scuttled than you realize. Doug will have to now address the issue between now and the AGM. Like I said before on both this SH board and the SPB SH board, now the real fun begins! Canexus needs the $25 million break fee just to stay solvent! Kherson

[pierrelebel]

Based on current prices of $11.00 for SPB and $1.30 for CUS, the discount is now at 22%. Worth a shot?

[Kherson]

Nope! The deal is not gonna happen! Kherson

[Roxy27]

pierrelebel, To make that call you should have a view on what the CUS share price will go to if the deal doesn't proceed or is renegotiated. Then you can apply a % odds to the event. If its a regulatory issues that prevents the deal from going forward, and therefore SPB wouldn't owe the break-up fee (I can't confirm this), that's bad news for CUS. SPB is up over 4% on the news vs