VenGrowth Asset Management Inc.

VenGrowth Asset Management Inc.

April 08, 2011 10:39 ET

GrowthWorks' New Deadline Evidences Weak Support from VenGrowth Shareholders

Shareholders Are Encouraged to Keep Control Over Their Vote

TORONTO, ONTARIO--(Marketwire - April 8, 2011) - GrowthWorks announced yesterday that it has extended its deadline for submitting support agreements that would grant it an irrevocable power of attorney. In an advisor call on April 6, 2011, David Levi advised that GrowthWorks has not received the number of support agreements necessary to requisition a shareholder meeting for any of the VenGrowth Funds. This resulted in GrowthWorks having to extend its artificial deadline from April 8 to April 21, 2011.

The Special Committee of the Boards of Directors of the VenGrowth Funds continues to be concerned about the rights of VenGrowth shareholders. GrowthWorks' deadline of April 8 caused anxiety for our shareholders and their advisors who have complained to us about GrowthWorks' aggressive treatment. We understand that the vast majority of our shareholders have seen through GrowthWorks' effort to hijack an otherwise orderly competitive process designed to benefit VenGrowth shareholders.

"It would appear that investors are choosing to keep control of their votes and waiting to make their own decision when a fully reviewed and independently evaluated offer is presented by VenGrowth in May," said John Kingston, Chair of the Special Committee. "We believe that shareholders are not prepared to give up their right to vote on any proposal that may be presented to them."

In January, 2011 VenGrowth formed an independent Special Committee to invite proposals from interested parties in order to secure the best deal for shareholders of the VenGrowth Funds and improve their liquidity options. We invited GrowthWorks to participate in this process and had hoped it would. Despite several further invitations, GrowthWorks has declined to participate.

Without more detailed information from GrowthWorks, we are unable to understand how our shareholders would benefit from a merger with a Fund that has its own apparent liquidity problems. In a due diligence request, the Special Committee also sent out a detailed list of questions to management of GrowthWorks to obtain information that would explain some of the deficiencies in their proposal. It remains to be seen whether GrowthWorks will respond in a constructive manner.

"Despite GrowthWorks' slurs against the Committee and our process, we again invite them to engage in our formal competitive review process, so that their offer can be properly compared to existing offers," said John Kingston.

Maintain Your Right To Choose

"The Special Committee and its independent financial adviser, Crosbie & Company, remain committed to presenting shareholders with the best offer in May of this year," said John Kingston. "We believe that our shareholders should judge for themselves and not allow GrowthWorks to take control of their votes." A standard proxy will allow investors to make their own decision on a proposed transaction and to change their mind and revoke their proxy up to the date of the shareholder meeting. They cannot do this under the terms of GrowthWorks' support agreement. If GrowthWorks is confident of their proposal, why do they fear giving our shareholders the right to choose?



Contact Information

  • Media Inquiries:
    VenGrowth Asset Management Inc.
    Wesley Ollson
    Product Management and Communications
    (416) 628-9263