Canico Resource Corp.
TSX : CNI

Canico Resource Corp.

October 12, 2005 09:00 ET

Canico Board Recommends Shareholders Reject CVRD Offer and Not Tender Canico Shares to the CVRD Offer

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 12, 2005) - Canico Resource Corp. ("Canico") (TSX:CNI) today announced that its Board of Directors has unanimously recommended that Canico shareholders REJECT the unsolicited offer to purchase all of the outstanding Canico shares made by Rio Doce Holdings Canada, Inc., a wholly-owned indirect subsidiary of Companhia Vale do Rio Doce ("CVRD"), as described in a take-over bid circular dated September 23, 2005, and that shareholders NOT TENDER their Canico shares to the CVRD offer. The Board's recommendation, Canico's Special Committee's assessment of the CVRD offer and the reasons for the recommendation to reject the CVRD offer are set out in a Directors' Circular which has been mailed to Canico shareholders and may be viewed in its entirety on www.sedar.com and on Canico's website www.canico.com.

"After a full and thorough review by our Board, our Special Committee and our legal and financial advisors, our Directors were unanimous in recommending rejection of the CVRD offer," said Michael Kenyon, President & CEO of Canico. "In doing so, the Board relied upon the fairness opinion of BMO Nesbitt Burns Inc. to the Special Committee and the Board dated October 7, 2005 and the fairness opinion of Genuity Capital Markets to the Special Committee and the Board dated October 7, 2005. These opinions concluded, subject to the assumptions and the limitations contained therein, that the consideration offered by CVRD for Canico's shares is inadequate from a financial point of view."

CANICO RESOURCE CORP.

J. Michael Kenyon, President & CEO

Contact Information

  • Canico Resource Corp.
    J. Michael Kenyon
    President & CEO
    (604) 669-9446
    (604) 669-9447 (FAX)
    www.canico.com