Welcome!

News Feed Item

ShawCor Enters Into Agreement With Its Controlling Shareholder To Eliminate Its Dual Class Share Structure

TORONTO, January 14, 2013 /PRNewswire/ --

(TSX: SCL.A, SCL.B)

ShawCor Ltd. (TSX: SCL.A, SCL.B) ("ShawCor" or the "Company") announced today that the Board of Directors of ShawCor, after careful analysis, consideration and advice from the special committee of independent directors (the "Special Committee"), and advice from independent financial and legal advisors, has unanimously approved and the Company has entered into a definitive agreement with respect to a reorganization proposal negotiated by the Special Committee with ShawCor's controlling shareholder (the "Controlling Shareholder"). The Chair and the Vice-Chair abstained from voting on the transaction.

The proposed reorganization is to be implemented pursuant to a court-approved plan of arrangement under the Canada Business Corporations Act. The shareholders' meeting to consider the arrangement is expected to take place in late March of this year. The arrangement will require a special resolution of ShawCor shareholders approving the transaction in addition to approvals required under applicable securities laws.

The arrangement also requires approval by the Ontario Superior Court of Justice at a hearing to be held following the shareholders' meeting. If approved, the arrangement is expected to close late in the first quarter of 2013 or early in the second quarter.

The Special Committee retained TD Securities Inc. ("TD Securities") to act as its financial advisor and to provide an independent fairness opinion, and received independent legal advice from Stikeman Elliott LLP. Kingsdale Shareholder Services Inc. has been retained as proxy solicitation agent.

Terms of the Transaction

The reorganization proposal contemplates the elimination of ShawCor's dual class share structure through the purchase of all of the Class A and Class B shares of ShawCor by a newly formed Canadian corporation. The new corporation would purchase all of the Class A shares of ShawCor in exchange for new common shares on a 1:1 basis. The new corporation would also acquire all of the Class B shares of ShawCor in exchange for a mix of new common shares and cash. The consideration paid for the Class B shares of ShawCor will be $43.43 in cash or 1.1 new common shares per Class B share, such that 90% of the total consideration will be paid in cash and 10% of the total consideration will be paid in new common shares. At closing, a special dividend of $1.00 per share would be paid on all remaining shares (the record and payment dates for such dividend remain to be determined) and the new corporation and ShawCor would amalgamate, under the name ShawCor Ltd. All issued and outstanding shares would as a result be the same class of common shares.

The closing conditions of the reorganization proposal include, among others, receipt of required ShawCor shareholder approvals, receipt of Toronto Stock Exchange approval, receipt of court approvals, there being no material adverse change in the affairs of ShawCor or applicable laws, and sufficient financing being available to complete the transactions contemplated in the reorganization. ShawCor's board would also retain a "fiduciary out" ability to change its recommendation to shareholders.

Recommendation of the Board and the Special Committee

In approving the definitive agreement and making its recommendation that shareholders (other than the Controlling Shareholder) vote in favour of the reorganization proposal, the Board of Directors and the Special Committee considered the fairness opinion prepared by TD Securities and a number of other factors relating to the fairness of the reorganization proposal.

The factors relating to fairness considered by the Board and the Special Committee included, among others, the following:

  • The reorganization transaction is expected to be accretive to ShawCor from an earnings per share perspective.
  • The premium to the current trading price and resulting dilution to Class A shareholders is within the range of precedents generally for similar types of transactions.
  • The Special Committee has received a fairness opinion from TD Securities that the consideration to be paid to the Class B shareholders pursuant to the Arrangement is fair, from a financial point of view, to the Class A and Class B shareholders, other than the Controlling Shareholder.
  • The elimination of the Class B shares may facilitate future change of control transactions following the completion of the transaction. It will also result in a widely held single class structure, and is expected to diversify ShawCor's shareholder base, as many investment mandates exclude investment in companies with dual class structures, and to increase liquidity and provide for enhancing financing flexibility going forward.
  • The transaction is subject to shareholder and court approval, and shareholders will be provided with dissent rights.
  • After completion of the transaction, all remaining shareholders will receive a $1.00 per share special dividend.

Notice to Investors

This news release is for informational purposes only and is not an offer to buy or the solicitation of an offer to sell any securities.

Forward Looking Information

This document includes certain statements that reflect the Board's and the Special Committee's expectations and objectives for the Company's future performance, opportunities and growth, which statements constitute forward-looking information under applicable securities laws.  Such statements, other than statements of historical fact, are predictive in nature or depend on future events or conditions. Forward looking information involves estimates, assumptions, judgments and uncertainties.  These statements may be identified by the use of forward-looking terminology such as ″may″, ″will″, ″should″, ″anticipate″, ″expect″, ″believe″, ″predict″, ″estimate″, ″continue″, ″intend″, ″plan″, ″ possibility″ and ″unlikely″, and variations of these words or other similar expressions. 

Forward looking information involves known and unknown risks and uncertainties that could cause actual results to differ materially from those predicted by the forward looking information.  We caution readers not to place undue reliance on forward looking information, as a number of factors could cause actual events, results and prospects to differ materially from those expressed in or implied by the forward looking information.  Significant risks facing the Company include, but are not limited to: changes in global or regional economic activity and changes in energy supply and demand, which impact on the level of drilling activity and pipeline construction; exposure to product and other liability claims; shortages of or significant increases in the prices of raw materials used by the Company;  compliance with environmental, trade and other laws; political, economic and other risks arising from the Company's international operations; fluctuations in foreign exchange rates, as well as other risks and uncertainties, as more fully described under the heading "Risks and Uncertainties" in the Company's annual MD&A; as well as the possible effects of a change of control or other significant transaction.

When considering the forward looking information in making decisions with respect to the Company, readers should carefully consider the foregoing factors and other uncertainties and potential events.  The Company does not assume the obligation to revise or update forward looking information after the date of this document or to revise it to reflect the occurrence of future unanticipated events, except as may be required under applicable securities laws.

Additional Information

The foregoing description of the proposed transaction does not purport to be complete and is qualified in its entirety by reference to the copy of the definitive agreement entered into by ShawCor in respect of the reorganization proposal, which will be available at http://www.sedar.com. ShawCor cautions shareholders and others considering trading in securities of ShawCor that the reorganization proposal is subject to certain material conditions, some of which are beyond ShawCor's control, including shareholder and court approval, and there can be no assurance that the transaction contemplated by the reorganization proposal, or any other transaction, will be completed.

ShawCor Ltd. is an energy services company specializing in products and services for the pipeline and pipe services and the petrochemical and industrial segments of the oil and gas industry. The Company operates through eight divisions with over seventy manufacturing and service facilities located around the world.

For further information:

Kingsdale Shareholder Services Inc,
Call North America toll-free: 1-877-657-5859
Banks and brokers call collect: 1-416-867-2272

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Designing IoT applications is complex, but deploying them in a scalable fashion is even more complex. A scalable, API first IaaS cloud is a good start, but in order to understand the various components specific to deploying IoT applications, one needs to understand the architecture of these applications and figure out how to scale these components independently. In his session at @ThingsExpo, Nara Rajagopalan is CEO of Accelerite, will discuss the fundamental architecture of IoT applications, ...
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit y...
In his session at 18th Cloud Expo, Bruce Swann, Senior Product Marketing Manager at Adobe, will discuss how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects). Bruce Swann has more than 15 years of experience working with digital marketing disciplines like web analytics, social med...
Enterprise networks are complex. Moreover, they were designed and deployed to meet a specific set of business requirements at a specific point in time. But, the adoption of cloud services, new business applications and intensifying security policies, among other factors, require IT organizations to continuously deploy configuration changes. Therefore, enterprises are looking for better ways to automate the management of their networks while still leveraging existing capabilities, optimizing perf...
The essence of data analysis involves setting up data pipelines that consist of several operations that are chained together – starting from data collection, data quality checks, data integration, data analysis and data visualization (including the setting up of interaction paths in that visualization). In our opinion, the challenges stem from the technology diversity at each stage of the data pipeline as well as the lack of process around the analysis.
Cloud computing changed data analytics for good. It enabled companies to drastically decrease resources and architecture previously assigned with business intelligence departments. It also enabled laymen to run advanced business analytics. Cloud was also the architecture of choice for storing and processing big data. Data piling is a continuous process, which is going to explode with emerging Internet of Things concept. Answer to this issue developers found in new concept called fog computing. ...
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 19th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world and ThingsExpo New York Call for Papers is now open.
There are several IoTs: the Industrial Internet, Consumer Wearables, Wearables and Healthcare, Supply Chains, and the movement toward Smart Grids, Cities, Regions, and Nations. There are competing communications standards every step of the way, a bewildering array of sensors and devices, and an entire world of competing data analytics platforms. To some this appears to be chaos. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists will discuss the vast to...
Many banks and financial institutions are experimenting with containers in development environments, but when will they move into production? Containers are seen as the key to achieving the ultimate in information technology flexibility and agility. Containers work on both public and private clouds, and make it easy to build and deploy applications. The challenge for regulated industries is the cost and complexity of container security compliance. VM security compliance is already challenging, ...
As cloud and storage projections continue to rise, the number of organizations moving to the cloud is escalating and it is clear cloud storage is here to stay. However, is it secure? Data is the lifeblood for government entities, countries, cloud service providers and enterprises alike and losing or exposing that data can have disastrous results. There are new concepts for data storage on the horizon that will deliver secure solutions for storing and moving sensitive data around the world. ...
SYS-CON Events announced today that Enzu, a leading provider of cloud hosting solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Enzu’s mission is to be the leading provider of enterprise cloud solutions worldwide. Enzu enables online businesses to use its IT infrastructure to their competitive advantage. By offering a suite of proven hosting and management services, Enzu wants companies to foc...
SYS-CON Events announced today the How to Create Angular 2 Clients for the Cloud Workshop, being held June 7, 2016, in conjunction with 18th Cloud Expo | @ThingsExpo, at the Javits Center in New York, NY. Angular 2 is a complete re-write of the popular framework AngularJS. Programming in Angular 2 is greatly simplified. Now it’s a component-based well-performing framework. The immersive one-day workshop led by Yakov Fain, a Java Champion and a co-founder of the IT consultancy Farata Systems and...
Customer experience has become a competitive differentiator for companies, and it’s imperative that brands seamlessly connect the customer journey across all platforms. With the continued explosion of IoT, join us for a look at how to build a winning digital foundation in the connected era – today and in the future. In his session at @ThingsExpo, Chris Nguyen, Group Product Marketing Manager at Adobe, will discuss how to successfully leverage mobile, rapidly deploy content, capture real-time d...
IoT generates lots of temporal data. But how do you unlock its value? How do you coordinate the diverse moving parts that must come together when developing your IoT product? What are the key challenges addressed by Data as a Service? How does cloud computing underlie and connect the notions of Digital and DevOps What is the impact of the API economy? What is the business imperative for Cognitive Computing? Get all these questions and hundreds more like them answered at the 18th Cloud Expo...
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, will provide an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life ...