Coast Wholesale Appliances Inc.

Coast Wholesale Appliances Inc.

March 20, 2014 15:57 ET

Coast Wholesale Appliances Inc. Announces Receipt of Inadequacy Opinion

VANCOUVER, BRITISH COLUMBIA--(Marketwired - March 20, 2014) - Coast Wholesale Appliances Inc. (TSX:CWA) ("Coast") announced today that it has received an inadequacy opinion (the "Inadequacy Opinion") from its financial advisor, CIBC World Markets Inc. ("CIBC"). The Inadequacy Opinion confirms that the consideration offered to shareholders of Coast pursuant to the offer by CWAL Investments Ltd. ("CWAL") to purchase all of the issued and outstanding common shares of Coast not beneficially owned by CWAL and its joint actors at a price of $4.55 per share (the "Offer") is inadequate, from a financial point of view, to such shareholders. A copy of the Inadequacy Opinion, including a formal valuation, will be included in the Directors' Circular, which will be finalized on or before March 27, 2014.

Important Shareholder Information

The board of directors of Coast (the "Board") recommends that Coast shareholders DO NOT TENDER any of their common shares to CWAL and take no action until the Board issues its formal recommendation in its Directors' Circular.

Steps Taken to Protect Interests of Shareholders and Maximize Value

In response to the Offer, the Board has taken several steps to ensure that the interests of Coast's shareholders and other stakeholders are fully protected and that they are treated fairly and to maximize value for all Coast's shareholders, including:

  1. forming a Special Committee of independent directors to evaluate the Offer;
  2. retaining CIBC as financial advisor to assist in considering the Offer and to provide an opinion as to the fairness of the Offer;
  3. adopting a shareholder rights plan; and
  4. undertaking a review of strategic alternatives to maximize value for all shareholders.

Forward-Looking Statements and Information

Certain statements herein may contain forward-looking statements and forward-looking information within the meaning of applicable securities laws. Such forward-looking statements and forward-looking information include, but are not limited to statements concerning the review of the Offer, the preparation of a Directors' Circular, the provision by the Board of its consideration and any recommendations to shareholders and the development and pursuit of alternatives to maximize shareholder value. Such statements and information include statements regarding the expectation and beliefs of management and appear in a number of places and often can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate" or "believes" or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. These statements are based on information currently available to Coast's management and on the current assumptions, intentions, plans, expectations and estimates of management regarding Coast's future growth, results of operations, performance, business prospects and opportunities and ability to attract and retain customers as well as the economic environment in which it operates. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors which could cause actual results of Coast to differ materially from the conclusion, forecast or projection stated in such forward-looking statements. These risks, uncertainties and other factors include, but are not limited to: actions taken by CWAL; actions taken by shareholders of Coast in respect of the Offer; the possible effect of the Offer on Coast's business; sensitivity to general economic conditions; changes in consumer confidence in the economy; maintenance of profitability and management of changes in Coast's business; competition; increases to interest rates; reliance on suppliers and their ability to supply product for sale on a timely basis; changes in consumer preferences; changes in the mix of product sales; fluctuations in fuel and commodity pricing, which may impact freight and other costs; usage of extended warranty programs and the costs to deliver these services; changes to planning and supply chain processes; lack of long term supplier agreements; reliance on key personnel; foreign exchange rates as they relate to imported products; and other factors referenced in Coast's continuous disclosure filings which are available on SEDAR at

Although the forward-looking statements contained herein are based upon what management believes to be reasonable assumptions, we cannot assure investors that actual results will be consistent with these forward-looking statements. The forward-looking statements reflect management's current beliefs and are based on information currently available to us. They speak only as of the date hereof, and reflect current assumptions regarding future events and operating performance. These assumptions include, without limitation: slow economic growth in Coast's current market areas; continued fluctuations in exchange rates; continued low interest rates through 2014; continuing cautious credit markets in which Coast's major builder customers obtain financing for their current and future building activities; weak consumer confidence due to the slow economic recovery, which may be reflected in lower retail sales; and no significant change to the total housing starts in 2014 compared to those recorded in 2013. These forward-looking statements are made as of the date hereof and Coast assumes no obligation to update or revise them to reflect new events or circumstances, other than as required by law.

About Coast

Coast is a leading independent supplier of major household appliances and accessories to builders and developers of multi-family and single-family housing, and to retail customers. Founded in 1978, Coast operates stores across the four western provinces and in the Greater Toronto Area of Ontario, as well as a network of warehouse distribution centres strategically situated to serve these locations.

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