60c cash purchase ZPP ENTERS INTO DEFINITIVE AGREEMENT TO BE ACQUIRED BY MAJOR SHAREHOLDERS GROUP
Zongshen PEM Power Systems Inc. has entered into a definitive agreement with Zongshen Industrial Group Co. Ltd. and Hong Kong VAS International Development Ltd., an investment entity controlled indirectly by ZIG, pursuant to which HKVAS has agreed to acquire all of the issued and outstanding common shares of the company not owned by HKVAS or ZIG for 60 cents per share in cash.
The purchase price to be paid to ZPP's shareholders represents a 13.2-per-cent premium over the closing price of the shares on the Toronto Stock Exchange on Oct. 30, 2012, and an 37.5-per-cent premium over the 30-trading-day volume-weighted average share price. The transaction will be structured as a plan of arrangement under the Business Corporations Act (British Columbia). Pursuant to the terms of the arrangement, all outstanding shares not owned by HKVAS or ZIG will be transferred to HKVAS in exchange for a cash payment of 60 cents per share. The estimated transaction value for the shares is approximately $22-million, financed by HKVAS.
Holders of options to acquire the shares have agreed to surrender their options for cancellation upon completion of the arrangement.
Completion of the arrangement is subject to, among other things, customary conditions, including approval of at least two-thirds of the votes cast by ZPP's shareholders in person or by proxy at the special shareholders meeting to be held in December, 2012, and the receipt of court and necessary regulatory approvals. The arrangement is also subject to approval by a simple majority of votes cast in person or by proxy by the disinterested shareholders of ZPP, excluding certain votes outlined in Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions. HKVAS and ZIG collectively hold approximately 63.5 per cent of the outstanding shares.
Recommendation of the independent directors of the board of directors of ZPP
An independent committee of the board, after consulting with its financial and legal advisers, has unanimously determined that the arrangement is fair to ZPP's shareholders and has unanimously resolved to recommend that ZPP's shareholders vote in favour of the arrangement at the meeting. Details of the terms and conditions of the arrangement will be included in an information circular for the meeting to be mailed to ZPP's shareholders. The arrangement is expected to close shortly after the meeting.
A copy of the arrangement agreement, the information circular and related documents will be filed with Canadian securities regulators and will be available at SEDAR.
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