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

RE:RE:Shareholder Approval of Deal

[BlueCollar51]

phoenix; If I still had my CUS shares this is how I would assess the offer from Superior Plus.
 
First it’s the Chemical Industry. It’s not the best of times for the Industry. There has been some price weakness and the near/mid-term outlook for the industry is not robust.
 
In the current environment Chemical Production facilities do not sell for “premium” multiples.
 
Superior is offering 8.5 x the trailing EBITDA. That is certainly not a “premium” but it’s not a “fire sale” price. In my “opinion” all things considered it is a “very fair” offer.
 
Unfortunately for the CUS shareholders after the net debt and cost to get the deal done is subtracted there is only $316m left for them. Superior has chosen to offer that in the form of SPB shares.
 
If the market thought that there was the possibility of a better offer the CUS share price would have shot past the implied $1.70 offer. Anything is possible but the market seems to be saying that the probability of a better offer is somewhere between slim and none.
 
I tend to agree that a Dedicated, Competent Management team willing to roll up their sleeves and earn their pay cheques could with a bit of help from the market (better chemical prices) over a 3 – 5 year period turn Canexus around.
 
The current Canexus Management have indicated that they would rather walk away with their pockets full of severance pay than roll up their sleeves and earn their pay cheques.
 
Then the question becomes will your Equity in Canexus be better served by a Management team of dubious ability that has no interest or one (Superior Plus) that has demonstrated not only the willingness to roll up their sleeves but the ability to get the job done well.
 
It’s not for me to tell you or anybody else how to vote their shares. You can probably guess how I would vote if I had some.
 
Sometimes you have to be pragmatic and get what you can while there is still something to get.
 
There is no big hurry to make a final decision.
 
** Both Canexus and Superior will be releasing their Q3 results in early November. Everybody will have one more Quarter of Specialty Chemical and corporate results from both companies to assess and compare.
 
As Always; Do Your Own Due Diligence; It’s Your Money !!