EXFO Inc EXFO

RE:IMO the Independent BOD and The Special Committee and

[modulex]

Hi Malpeque2

In response to your July 23, 2021 posting, to which i agree, Mr. Lamonde has either the choice to maintain a status quo, that is taking the risk of keeping his standstill offer at $6 US, hopefully thinking that he will rallye enough minority shareholders to approve it on August 13, 2021 or to call Viavi Solutions Inc.'s President and CEO, Mr. Oleg Khaykin at [phone] and inform him that he is willing to sell Exfo in a price range of $10-$12/share.  Mr. Lamonde does not have a middle ground alternative, that is to match up Viavi's offer at $8 US, as "Viavi" would increase its offer again, perhaps at $8.50, $9.  That would result in a cat and mouse game.  As you stated, there are no reasons for minority shareholders to hasten selling their shares in the current situation, while there is a takeover offer on the table.  "Viavi" could take a legal procedure before August 13, 2021 in asking the Quebec Superior Court (since Exfo is located in the province of Quebec) to grant it authorization to purchase Exfo at $8 US/share.  That would give "Viavi" the opportunity to interrogate Mr. Lamonde before a judge in order to find out why Mr. Lamonde is being biased in saying that his $6 US offer is accurate and definitive, while management and the Board of directors of a public company like Exfo have the duty to provide all of its shareholders the best profitable return on any transaction, whether a privatization, a takeover or a merger.  Mr. Lamonde is strictly attempting to privatize Exfo to enrich his family trust, purely and simply.

• Mr. Lamonde has well before June 7, 2021, the day on which Exfo Inc. announced its privatization offer at $6 US/per share been part of discussions related the said privatization offer.  It is therefore inaccurate from Exfo's Board members to say that he was kept at arm's length throughout the process leading to the June 7, 2021 announcement.
• Mr. Lamonde is being a self-centered person in this proposed transaction, as he controls 61.46 per cent of Exfo outstanding shares and 93.53 per cent of voting rights.  He, therefore, couldn't care less about minority shareholders.  His assertion that the vote on the proposed transaction will be decided by all shareholders is inaccurate as given his ratio of holdings in Exfo, the proposed transaction is solely dependent on him.
• Although Exfo Inc.'s book value is only $3.32 US/per share and Mr. Lamonde's offer is $6 US/per share, the presence of an alternative superior offer from Viavi Solutions Inc., must prevail for all shareholders.
• Mr. Lamonde is wrong in claiming that when a person decides to become a shareholder in a company that has a controlling shareholder, any offer made to such company will only be accepted if the controlling shareholder approves it.  That controlling shareholder has the right to decide if his enterprise is for sale or not, says Mr. Lamonde.  Mr. Lamonde further mentions that it is the same thing as if someone stop at your home to tell you that he likes your house and would like to buy it.  You are not obliged to sell.  It is your choice.  It is your house.  Mr. Lamonde is disconnected by comparing a house to a public company.
• Mr. Lamonde is completely wrong in stating that Exfo Inc. is not for sale and has never been for sale.  He is distorting the notion that a  "privatization" offer, alike a "takeover" offer, alike a "merger" offer, entails a transaction.  If Mr. Lamonde was to acquire Exfo Inc.'s minority shareholders holdings, he would be a buyer and the said minority shareholders would be sellers.
•  
• It is unbelievable for a man like Mr. Lamonde to advocate that:

1. The idea to privatize Exfo Inc. stems from the desire of certain shareholders who have approched him many times, who believe that Exfo's stock is difficult to trade given its low float and given that the bulk of shares belongs to him.
2. That an independent committee did a thorough job over a long period, that led to a negotiation to establish the optimal price he was willing to pay.  That is not an accceptable behaviour in a public company.
3. That his $6 US offer is accurate and definitive, in line with the evaluation of an external firm (Toronto-Dominion), which external firm took into account the price that a strategic acquiror could pay for Exfo Inc., an acquiror that would cut expenses and  jobs.
4. A disturbing fact is that Mr. Lamonde reveals that Viavi Solutions Inc. has approached Exfo Inc. prior to June 7, 2021.  Obviously, since Mr. Lamonde did not reported that event to shareholders at the time it occured, Mr. Lamonde cannot deduct that Exfo Inc. was the target of a poor offer from Viavi Solutions Inc.  Mr. Lamonde clearly had something lying on the back of his mind for refusing Viavi Solutions Inc. offer then.
5. Mr. Lamonde is blaming Viavi Solutions Inc. to make Exfo Inc.'s privatization process derail and wanting to buy Exfo Inc. to become a larger industry player in the market for telecommunications measurement and testing solutions network.  There is nothing wrong for Viavi Solutions Inc. to achieve that goal.  Bottom-line, Mr. Lamonde has the duty to obtain the most beneficial offer for all Exfo Inc. shareholder and cannot use is overwhelming power at their detriment.