Falken Industries Ltd (OTCBB: FLKI) -
On several occasions in the past two years and continuing to the presentFalken management has been approached unofficially and discretely bywould-be merger or takeover suitors seeking an expression of interest onthe company's part - no formal letter expressing an intention was everreceived. The company has sought the help of attorneyswith expertise in such matters, in determining how best to respond tothe overtures of interested parties and has acted accordingly.
Falken is aware, and the Falken board confirms that the interest of theshareholders is the paramount concern. Consequently Falken has alwayslistened to would-be eventual proposals, and evaluated on findings,whether the proposal was serious.
Falken continues to invest heavily in product innovationand development; its product conceptions are globally received. Falkenoutsources to associates and members of its production networklogistical, purchasing and manufacturing functions. A little more than ayear ago it agreed to invest the company's reserves and use itsborrowing power to acquire other manufacturers if such acquisitions werein accord with the sound business
judgment of the board, and in the best interest of the company and itsshareholders. The company also confirmed that this would be a legal wayof coping with unfriendly takeover attempts.
The current Letter of Intent from Norex differentiates itself from anyprior dealings, in that it emanates from a member of Falken's productionnetworkand though totally unexpected, management does not view it asunfriendly. The offer is understood to be for cash, a precious commoditywhich would act as a "catalyst" for the development of Falken's ownstrategic planned acquisitions.
Management is presently working to evaluate a thorough list of optionscovering the advantages and disadvantages of entertaining andcooperating with such an acquisition. After review and furtherdiscussions with Norex, Falken's Executive Committee and Board willdecide if in light of the Company's plans for future development andfinancial projections for the next three years, acquisition of a controlposition in the Company by Norex would be advisable.
One of the matters to evaluate is whether a sale of control could bringmore than the $1.50 offered, or a public share exchange with one of themajor companies controlling the Company's competitors.
Consideration will include issues of adequacy, and the best interests of Falken Industries Ltd, its stockholders, its customers and the communities which it serves.
Falken's directors and management have faith in the momentum of thecompany, and currently believes that it is in the best interests of itsstockholders, customers and employees to take advantage of this momentumand continue to implement the Company's growth plans as an independentcompany. Whether such an environment can be maintained after the sale ofa controlling position to Norex is of course a key issue.
About Falken Industries Ltd:
Falken Industries Ltd (OTCBB: FLKI) is a diversified industrialconglomerate that operates in Chemicals, Wet Wipe and BiodegradableTechnology. Falken Industries Ltd is the concept behind more than 160products distributed through a network of global platforms and therecipient of trade awards for innovations, biodegradability andenvironmental and health quality standards.
SAFE HARBOR STATEMENT: This news release contains "forward-lookingstatements" made pursuant to the safe harbor provisions of the 1995 Private SecuritiesLitigation Reform Act. "Forward-looking statements" describe futureexpectations, plans, results, or strategies and are generally precededby words such as "future," "plan" or "planned," "will" or "should,""expected," "anticipates," "draft," "eventually" or "projected." Suchstatements are subject to risks and uncertainties that could causefuture circumstances, events, or results to differ materially from thoseprojected in the forward-looking statements, including the risks thatour products may not achieve customer acceptance or perform as intended,that we may be unable to obtain necessary financing to continueoperations and development, and other risks. You should consider thesefactors in evaluating the forward-looking statements included herein,and not place undue reliance on such statements.
Contacts:
Falken Industries Ltd
Manuel Garcia
Communications Officer
+1609 357 0316
mgarciafaure@falkenltd.com