Take over not done ...yet
McVicar to acquire 7.51 million tendered Jite shares
2012-04-05 14:01 ET - News Release
Shares issued 20,073,612
JTI Close 2012-04-03 C$ 0.60
From News Release (C-MCV) McVicar Industries Inc
Mr. Winfield Ding of McVicar reports
MCVICAR INDUSTRIES INC. TO ACQUIRE 7.5 MILLION SHARES OF JITE TECHNOLOGIES FROM FEBRUARY 28, 2012 OFFER
McVicar Industries Inc. has learned that 7,517,356 common shares of Jite Technologies Inc. have been tendered to McVicar's Feb. 28, 2012, offer to acquire all of the outstanding common shares of JTI it did not already own which expired at 5 p.m. Toronto time yesterday. The number of shares tendered represents 85.54 per cent of the 8,788,363 JTI shares which were subject to the offer which is less than the minimum tender stipulated in paragraph 1 of Section 4, Conditions of the Offer. However, McVicar has determined to waive such condition and to take up and pay for all of the shares tendered, thereby increasing its holdings of JTI shares from 11,285,250 (56.2 per cent) to 18,802,606 (93.67 per cent). Payment for the shares taken up will be made by Tuesday, April 10, 2012.
As part of the transaction, the holders of all of the 1,186,000 outstanding options to purchase JTI shares, of all whom are directors, officer or employees of JTI, have surrendered their options for cancellation in consideration of a payment to them of $123,000, or 15 cents for each of the 820,000 in-the-money options having an exercise price of 45 cents. This consideration represents the difference between the 60-cent offer price and the exercise price. The 366,000 out-of-the-money options, having an exercise price of $1.80 per share, were cancelled without consideration.
McVicar will now evaluate the structure of a subsequent acquisition transaction as described in Section 13, Acquisition of Common Shares Not Deposited, of the circular attached to the offer and will take steps to convene a special meeting of shareholders of JTI for such purpose.
For cash management purposes and to avoid the administrative, tax and foreign exchange costs which may arise from an immediate disposition of its marketable securities, McVicar has secured a bridge financing facility from Dr. Gang Chai, the Chief Executive Officer of McVicar, and an associate of Dr. Chai, for a principal amount of up to CAD $1.4 million with interest at the prime rate of interest charged from time to time by the Bank of Montreal in Toronto on Canadian dollar loans to is most creditworthy customers plus one percent (1%) payable monthly in arrears on the balance outstanding from time to time. If the loan is not repaid by June 29, 2012, additional interest at the rate of 2% per month, calculated daily will be payable. The bridge financing facility is secured by a promissory note having a principal amount of CAD $1.4 million and maturing on June 29, 2012. This term will provide ample time for McVicar to repay the loan in an orderly manner and consequently will have no effect in the transition of McVicar business and affairs.
No securities of McVicar will be issued to the Lender and accordingly, the transaction will have no effect on the percentage of McVicar securities owned or controlled by the Lender. The bridge financing facility was considered and approved by the board of directors of McVicar at a meeting held earlier today at which Dr. Chai declared his interest in the transaction and abstained from voting. All of the three remaining directors, who are independent of McVicar within the meaning of applicable securities laws and the policies of the TSX Venture Exchange, approved the transaction. As the bridge financing facility involves only a loan to McVicar without any equity or voting component and is upon reasonable commercial terms which are no less advantageous to McVicar than would be available from independent sources and involves a value which is considerably less than 25% of the market capitalization of McVicar, the bridge financing facility is exempt from the Minority approval and formal valuation requirements of Multilateral Instrument 61-101 - 'Protection of Minority Security Holders in Special Transaction' of the Canadian Securities Administrators.
We seek Safe Harbor.