Falken Industries Ltd
OTC Bulletin Board : FLKI

Falken Industries Ltd

April 07, 2011 09:31 ET

Falken Formally Rejects Unsolicited Bid for Control Position

TRENTON, NEW JERSEY--(Marketwire - April 7, 2011) - Falken Industries Ltd. (OTCBB:FLKI) (http://www.falkenltd.com) global player in vehicular and industrial product conceptions, the most popular of which are those marketed under the Clean Plus® brand (http://www.cleanplus.com) announced today that it had, after completion of its due diligence, rejected the unsolicited offer for control made by Norex International.

Manuel Garcia, Communications officer said, "Falken management couldn't get comfortable with Norex' short-term forecasts, their revised proposals which significantly undervalued the business of Falken and most importantly its potential. Moreover, the dilutive impact of Norex' insistence on the issue of more shares, to achieve control was totally unacceptable and clearly not in the best interest of existing shareholders. They simply would not take their offer to the public markets," said Garcia.

"Norex' proposed price and consequential dilution significantly undervalued the company, including the greater value obtainable from the company's strategic plan, especially the value inherent in the company's diversified and robust portfolio of marketed and pipeline products," said Eric Garan of Caprocon a consulting firm advising Falken on the matter.

The rejection which had been anticipated by the market in the last several weeks sent FLKI shares tumbling 48% as short term traders and their markets spooked at the loss of the prospect for a quick gain. The decline is viewed by many as a buying opportunity for investors.

Had Norex taken its offer to the public markets, it is believed the board would likely have recommended the then take-over to shareholders. However Norex was steadfast in its position that control had to be obtained by the issue of new shares which would have the effect of materially diluting the stock.

Garcia stated, "I have had a huge number of messages from clients and suppliers who are pleased with the news. It is partly about a fondness for Falken, but it is mostly about certainty."

The company will now press ahead with ongoing negotiations and consider a supply contract bid from a Norex competitor which is expected to lower cost for productions as much as 11%.

About Falken Industries Ltd:

Falken Industries Ltd (OTCBB:FLKI) is a diversified industrial conglomerate that operates in Chemicals, Wet Wipe and Biodegradable Technology. Falken Industries Ltd is the concept behind more than 160 products distributed through a network of global platforms and the recipient of trade awards for innovations, biodegradability and environmental and health quality standards. 

SAFE HARBOR STATEMENT: This news release contains "forward-looking statements" made pursuant to the safe harbor provisions of the 1995 Private Securities Litigation Reform Act. "Forward-looking statements" describe future expectations, plans, results, or strategies and are generally preceded by words such as "future," "plan" or "planned," "will" or "should," "expected," "anticipates," "draft," "eventually" or "projected." Such statements are subject to risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that our products may not achieve customer acceptance or perform as intended, that we may be unable to obtain necessary financing to continue operations and development, and other risks. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements.

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