Morning Star Resources Ltd.

November 06, 2013 15:50 ET

Concerned Shareholder's Nominees Announce Plans for Boss After Closing of $30 Million Settlement

Plan Returns a Substantial Amount of Capital to Boss' Shareholders

Boss Unable to Refute Independent Director's Statements; Boss Confirms that Independent Director No Longer Supports Boss

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Nov. 6, 2013) - Morning Star Resources Ltd. (the "Concerned Shareholder") today announced its director nominees (the "Blue Nominees") plans, if elected, following closing of the $30 million settlement. The Blue Nominees believe that Boss shareholders have waited too long to see any return on their investment. Accordingly, under the Blue Nominees plan, shareholders will be given the choice to either elect to see a substantial return of capital on their shares and move on, or keep their shares and be a part of Boss's future. The Blue Nominees chose this plan of action after careful consideration of the best alternatives to move Boss forward, as well hearing the concerns of a number of Boss's minority shareholders.

The Blue Nominees' plan to move Boss forward

The Blue Nominees believe that the most beneficial outcome for all shareholders following closing of the $30 million settlement is to be afforded the opportunity to be compensated for their investment as soon as possible and to move on if they wish. To do so efficiently and fairly, and to give shareholders the greatest flexibility and choice, the Blue Nominees' plan is for Boss to make a substantial return of capital to shareholders after the settlement closes. This may be done by way of an issuer bid, plan of arrangement or other appropriate corporate transaction whereby Boss would pay shareholders fair value for their shares.

Under its plan, the Blue Nominees will provide all of Boss's shareholders the opportunity to immediately "cash out" all, or a portion, of their investment. The Blue Nominees believe that this represents the best outcome for Boss's shareholders who wish to immediately divest their investment in Boss and who have been waiting over two years since the announcement of the settlement for some return on their investment.

Under the planned return of capital, Boss would offer to purchase shares for cancellation or return to shareholders, on a pro-rata basis, at least 95% of the net tangible value of the common shares. The minimum offering price (the "Minimum Price"), based on Boss's current public disclosure, would be $0.30 per share, which represents a premium of about 155% from the current price of the Boss shares. The price actually paid by Boss per share pursuant to the return of capital will be the subject of a fairness opinion to be prepared by an independent Canadian investment bank, which may determine that the fair price is higher than $0.30 a share (but the Minimum Price will not be reduced to less than $0.30 per share). The offer will not be conditional on any minimum number of shares being tendered to the offer.

The Blue Nominees believe that the return of capital is in the best interest of Boss and all of its shareholders and is the most equitable and efficient way to distribute the $30 million settlement proceeds to shareholders while proportionately increasing the equity interest in Boss of shareholders who choose not to tender. After giving effect to the return of capital, the Blue Nominees believe that Boss will continue to have sufficient financial resources and working capital to pursue strategic acquisitions and business opportunities for the future growth of Boss's business.

"What the blue nominees are proposing is to give all Boss shareholders a choice," commented Anthony Beruschi, President of the Concerned Shareholder. "Their plan affords every shareholder the same opportunity to receive fair value for their investment quickly and without market risks and move on, or increase the equity interest in Boss of shareholders who decide that they want to be a part of Boss's future. This fresh approach represents an equitable outcome for all of Boss's shareholders."

In summary, the Blue Nominees will:

  • close the settlement promptly after being elected and secure the $30 million proceeds.
  • return a substantial amount of capital to shareholders who choose to immediately "cash out" at a minimum of $0.30 per share or higher depending on a fairness opinion to be prepared by an independent Canadian investment bank.
  • proportionately increase the equity interest of Boss's shareholders who chose not to tender to the Offer and be involved in Boss's future growth.

Boss has lost the support of its independent director

On November 4, the Concerned Shareholder announced that Boss's only independent director had declared his support for the Concerned Shareholder and intends to vote for the Concerned Shareholder's nominees at the upcoming meeting of Boss's shareholders. As a result, Boss's management information circular no longer reflects the unanimous views of the board and contains false, improper and misleading statements. The Concerned Shareholder has written to Boss to demand that Boss's circular be refiled to include accurate and candid disclosure of all material facts so that shareholders can make a reasoned decision on the future directors of Boss. The Concerned Shareholder urges shareholders not to rely on Boss's management information circular until a truthful circular is filed. In light of these developments, the Concerned Shareholder has also demanded that Boss immediately retract its previous untruthful news releases.

The Blue Nominees

The Concerned Shareholder has nominated four highly qualified, independent nominees to Boss's board. Recently, certain conflicted directors of Boss have made a substantial issue regarding the bankruptcy of Christmas in Wonderland Productions Inc. The Concerned Shareholder does not believe that this is material information, but is providing this disclosure to shareholders to ensure that they have all information that may be relevant to their voting decisions at the upcoming shareholders' meeting.

Mr. Shaw is a well-respected television executive and film producer in Canada and internationally, and is one of the Concerned Shareholder's nominees. As Mr. Shaw has been actively involved in the dynamic B.C. television and film industry for decades, he has been a director and officer of in excess of 150 private companies which are incorporated for the purpose of owning a film production. On January 19, 2010, one such private company, Christmas in Wonderland Productions Inc., was petitioned into bankruptcy following a dispute with the US based production manager who was replaced on the show. Mr. Shaw was not a director of Wonderland Productions at the time of its bankruptcy filing, having resigned approximately 10 days earlier.

Don't let Boss's $30 million settlement be lost. Shareholders should vote their BLUE proxy or VIF by 11:00 A.M. (PACIFIC TIME) FRIDAY, NOVEMBER 8, 2013. A vote for your BLUE proxy or VIF is a vote to save the $30 million settlement and return funds to shareholders.


For assistance voting your BLUE proxy or VIF, shareholders should contact Valiant Trust Company toll-free at 1-877-699-4880 or 1-866-313-1872, or by email at Our proxy circular and letter to shareholders has been mailed to shareholders and is also available on SEDAR at To keep current with further developments and for information about how to vote your shares, we have set up a website at, which we encourage shareholders to visit regularly.

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