TORONTO, Sept. 26, 2016 /CNW/ - Chemtrade Logistics Income Fund (TSX: CHE.UN)
("Chemtrade" or the "Fund") announced that on September 15, 2016 it made a revised
friendly proposal to acquire Canexus Corporation (TSX:CUS)
("Canexus") for $1.50 per share in cash. Chemtrade's revised proposal included a draft
arrangement agreement on effectively the same terms as the agreement Canexus entered into with Superior Plus Corp., but with less
regulatory risk to Canexus. Chemtrade was prepared to enter into this agreement by September 20,
2016.
Despite the fact that Chemtrade's revised proposal represented fair value, provided 100% cash consideration and low completion
risk to Canexus shareholders, the Canexus board of directors (the "Canexus Board") chose not to engage with Chemtrade
to negotiate a value-maximizing transaction.
Timeline of Events:
- As previously disclosed, on September 6, 2016 Chemtrade made a proposal to
the Canexus Board to acquire Canexus for $1.45 per share in cash. The Canexus Board summarily
rejected the proposal in a two sentence letter without having any discussions with Chemtrade.
- On September 14, 2016, Canexus announced the planned issuance of $75
million senior unsecured notes. The following day, two Canexus institutional shareholders issued public letters opposing
the offering, observing that the completion of the note offering could impair shareholder value and the likelihood of
shareholders receiving a value-maximizing proposal from Chemtrade or another party.
- On September 15, 2016, Chemtrade made a revised proposal of $1.50
per share and provided a draft arrangement agreement that Chemtrade was prepared to enter into before the scheduled closing of
Canexus' note issuance on September 20, 2016. Chemtrade also indicated in its letter that it was
willing to pay $1.60 per share if the note offering was cancelled, since the notes contained costs,
restrictions and prepayment penalties that decreased Canexus' value to Chemtrade.
- It was not until September 20, 2016 that Chemtrade was advised by the Canexus CEO that the
Canexus Board had unanimously rejected its proposal and that Canexus would continue to focus on executing its strategy. Earlier
that day, Canexus announced that it had completed an up-sized offering of $110 million of senior
unsecured notes.
- Since Chemtrade's initial proposal on September 13, 2016, Canexus shareholders have publicly
urged the Canexus Board to engage with Chemtrade. One of these shareholders stated that its view was shared by shareholders
representing over 25% of the outstanding common shares.
- On September 21, 2016, a shareholder owning over 9% of the outstanding common shares
requisitioned a special meeting of shareholders to replace the current members of the Canexus Board with five new
individuals.
"We are disappointed that the Canexus Board continues to refuse to engage with us. Only a year ago the Board determined that a
sale of Canexus was in the best interests of Canexus and its shareholders," said Mark Davis,
President and Chief Executive Officer of Chemtrade. "We encourage the Canexus Board to engage in constructive discussions with
Chemtrade so that shareholders can benefit from the opportunity to receive fair value and liquidity in a fully-funded all-cash
transaction."
Chemtrade has retained BMO Capital Markets as its exclusive financial advisor, Osler, Hoskin
& Harcourt LLP as its legal counsel, and Bayfield Strategy, Inc. as its strategic communications advisor.
About Chemtrade
Chemtrade operates a diversified business providing industrial chemicals and services to customers in North America and around the world. Chemtrade is one of North America's
largest suppliers of sulphuric acid, spent acid processing services, inorganic coagulants for water treatment, liquid sulphur
dioxide, sodium nitrite, sodium hydrosulphite and phosphorus pentasulphide. Chemtrade is a leading regional supplier of sulphur,
sodium chlorate, potassium chloride, and zinc oxide. Additionally, Chemtrade provides industrial services such as processing
by-products and waste streams.
Caution Regarding Forward-Looking Statements
Certain statements contained in this news release constitute forward-looking information within the meaning of certain
securities laws, including the Securities Act (Ontario). Forward-looking information can be
generally identified by the use of words such as "anticipate", "continue", "estimate", "expect", "expected", "intend", "may",
"will", "project", "plan", "should", "believe" and similar expressions. Specifically, forward-looking information in this news
release includes statements respecting Chemtrade's proposals to acquire Canexus, including the possibility and benefits of such a
transaction. Forward-looking statements in this news release describe the expectations of the Fund and its subsidiaries as of the
date hereof. These statements are based on assumptions and involve known and unknown risks, uncertainties and other factors that
may cause actual results or events to differ materially from those anticipated in such forward-looking statements for a variety of
reasons, including without limitation: the ultimate outcome of any possible transaction between Chemtrade and Canexus, including
the possibility that Canexus will not accept a transaction with Chemtrade or enter into discussions regarding a possible
transaction, the ultimate outcome and results of integrating the operations of Chemtrade and Canexus if a transaction is
consummated, the ability to obtain regulatory approvals and meet other closing conditions to any possible transaction, including
any necessary shareholder approvals, any changes in general economic and/or industry-specific conditions, as well as the risks and
uncertainties detailed under the "Risk Factors" section of the Fund's latest Annual Information Form and the "Risks and
Uncertainties" section of the Fund's most recent Management's Discussion & Analysis.
Although the Fund believes the expectations reflected in these forward-looking statements and the assumptions upon which they
are based are reasonable, no assurance can be given that actual results will be consistent with such forward-looking statements,
and they should not be unduly relied upon.
The Fund disclaims any intention or obligation to update any forward-looking information even if new information becomes
available, as a result of future events or for any other reason, except as required by law. The forward-looking information
contained herein are expressly qualified in their entirety by this cautionary statement.
Further information can be found in the disclosure documents filed by Chemtrade Logistics Income Fund with the securities
regulatory authorities, available at www.sedar.com.
SOURCE Chemtrade Logistics Income Fund
