Nordex Explosives Ltd.
TSX VENTURE : NXX

Nordex Explosives Ltd.

August 11, 2016 10:29 ET

Nordex Explosives Announces FURTHER INCREASE in OFFER PRICE from EPC GROUPE to $0.25 for each Nordex Share

KIRKLAND LAKE, ONTARIO--(Marketwired - Aug. 11, 2016) -

THIS PRESS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.

Nordex Explosives Ltd. ("Nordex" or the "Company") (TSX VENTURE:NXX) is pleased to announce that Société Anonyme d'Explosifs et de Produits Chimiques ("EPC") has agreed to once again increase its offer price to $0.25 per share in connection with the previously announced "going private transaction" with the Company (together with the previously announced "change of control transaction", the "EPC Transactions"). For further details regarding the EPC Transactions, please see the Company's recent news releases and its management information circular dated July 25, 2016, copies of which are available on www.SEDAR.com under the Company's profile.

The latest increased price offered by EPC to Nordex shareholders matches the cash consideration offered by Omnia Holdings Limited through its mining division ("BME") under its unsolicited take-over bid to acquire Nordex announced on August 3, 2016, which was varied on August 10, 2016 to increase the price per share offered by BME.

Jim O'Reilly, Chairman of the Board of Nordex, stated "We believe this latest price increase by EPC Groupe further validates the Board's belief that the EPC Transactions are in the best interests of the Company and its shareholders".

Olivier Obst, Chairman and CEO of EPC, stated "As previously announced, EPC Groupe strongly believes that the EPC Transactions are in the best interest of all parties, including Nordex and its stakeholders. With this latest price increase offered to Nordex shareholders, EPC Groupe has unequivocally demonstrated its firm commitment to completing these transactions."

The Board of Nordex strongly encourages its shareholders to vote FOR the EPC Transactions, which are in the best interests of Nordex and all its stakeholders. The EPC "change of control" transaction and "going private" transaction require the positive vote of 50% plus 1 and 66 2/3%, respectively, of the shares voted at the upcoming annual and special meeting of shareholders of Nordex (the "Meeting") to be convened on August 18, 2016 - this is a lower required threshold of support than the BME offer, which requires 66 2/3% of all of the issued and outstanding common shares to be tendered before any shares will be purchased by BME; and therefore a greater likelihood that the EPC Transactions will be approved and completed.

The Company will not dignify the latest inflammatory and misleading statements made by BME, other than to say that it is deeply regrettable that BME continues to resort to baseless personal attacks against members of the Board of Nordex that are without any foundation. The Board of Nordex has conducted itself with the utmost objectivity and professionalism in carrying out its duties and obligations, and has at all times served the best interests of Nordex and its shareholders. It is unfortunate that BME has attempted to denigrate the efforts of the Board in this manner.

Rather, in order to try to cut through the rhetoric, shareholders are strongly encouraged to focus on the following key considerations in making their decisions at the Meeting.

  • PRICE - EPC offers shareholders the HIGHEST cash consideration: The EPC going private transaction offers Nordex shareholders $0.25 per share, which is the highest cash consideration currently being offered by anyone. EPC has quickly and decisively matched every attempt by BME to increase the price under its unsolicited take-over bid.

  • TIMING - EPC offers shareholders the MOST EXPEDIENT cash consideration: The required regulatory approvals for the completion of the EPC Transactions have either been obtained or are well underway clearing the way to complete the EPC Transactions immediately after August 18, 2016 if approved by the shareholders.

  • BENEFITS - Benefits to STAKEHOLDERS and the Kirkland Lake community: EPC has legally committed to Nordex and its stakeholders to ensure the Company's long term survival in the community in a way that is fair and sustainable and EPC has confirmed its willingness to grow the business of Nordex from Kirkland Lake. On the other hand, BME has done little or nothing to reassure the Board or the Kirkland Lake community that it even has a plan, other than to say "trust us, we'll do what we think is best". Trust is simply not enough!

  • FINANCING - EPC committed New Equity Injection and Bridge Loan: EPC has committed to inject approximately $5,000,000 in equity into Nordex at a price of $0.12 per share in order for Nordex to pay out its high-cost debt and for working capital and investments, and a further $780,000 in low-cost loans. BME is NOT offering to make an equity investment in Nordex at any price. EPC believes that its agreed upon financings are absolutely necessary in order to enable Nordex to maintain and further develop its business.

  • UNCERTAINTY - BME is silent on required regulatory approvals; needs very high threshold: BME's offer is conditional upon at least 66 2/3% of the outstanding shares tendering to the offer before September 9, 2016, which would require approximately 13.6 million of the approximately 20.5 million outstanding shares being tendered to its bid. BME must also wait for the prescribed time periods under the Investment Canada Act to elapse. Nordex is of the view that it is highly unlikely that BME will be able to close its offer before late September.

  • RISK - BME is putting Nordex shareholders and the Company at serious risk - If the EPC Transactions are not approved on August 18, 2016, Nordex and its shareholders will be left at the mercy of BME and the conditions of its offer. BME is under no obligation to waive the conditions of its offer or to extend the offer upon its expiry on September 9, 2016. As a result, there can be no assurance that the BME offer can or will be completed. There is no reason to tender to the BME conditional offer, since shareholders of Nordex can receive the cash consideration in their pocket very quickly after August 18, 2016.

The EPC Transactions will be considered and voted on at the upcoming annual and special meeting of shareholders of Nordex on August 18, 2016. Shareholders are strongly encouraged to not jeopardize the immediate and certain value offered to Nordex and all of its stakeholders and VOTE FOR the EPC Transactions, and to not tender any of their shares to (or take any other action in respect of ) the BME offer until the outcome of the Meeting is known.

If you have any questions or need assistance voting your proxy, please contact D.F. King, our proxy solicitation agent, by telephone at 1-800-761-6707 (toll free in North America) or 1-201-806-7301 (Collect outside North America), or by email at inquiries@dfking.com.

About EPC

EPC Groupe (www.epc-groupe.com), a pioneer in France in manufacturing and distributing industrial explosives, is one of the leading independent players in the core business of explosives and drilling and blasting in Europe, the Middle East and Africa. With total annual revenues of approximately Cdn$480,000,000 and over 1,800 employees, the EPC Groupe is currently active in more than 20 countries around the world. For over 120 years, the EPC Groupe has been committed to providing solutions for its customers: geographically, technically and commercially. This commitment is demonstrated both by its global and expanding presence as well as by its development of innovative technologies. For Olivier Obst, Chairman and CEO of EPC, "the integration of Nordex within the EPC Groupe is a synergy driven operation. It is a unique opportunity as it will both allow EPC to develop its presence in North America and will provide Nordex with a wider range of technologies, products and services in order to consolidate its existing activity and access new market segments".

About Nordex Explosives

Nordex Explosives Ltd. is a Canadian based manufacturer and distributor of explosives for the mining, quarry and construction industries since 1970. Its manufacturing operations and distribution centre is strategically located in one of the world's largest mining regions near Kirkland Lake, Ontario. Nordex is the exclusive supplier of the "Buttbuster" perimeter control explosive products in Canada. Additional information can be found at: www.nordexexplosives.com.

Disclosure Regarding Forward-Looking Statements

This press release contains certain "forward-looking statements" within the meaning of applicable securities legislation relating to the BME offer, and to the proposal to complete the EPC Transactions and associated transactions, including statements regarding the terms and conditions of the EPC Transactions and the use of proceeds from the completion of the change of control transaction. The information about EPC contained in this press release has not been independently verified by Nordex. We use words such as "might", "will", "should", "anticipate", "plan", "expect", "believe", "estimate", "forecast" and similar terminology to identify forward looking statements and forward-looking information. Such statements and information are based on assumptions, estimates, opinions and analysis made by management in light of its experience, current conditions and its expectations of future developments as well as other factors which it believes to be reasonable and relevant. Forward-looking statements and information involve known and unknown risks, uncertainties and other factors that may cause our actual results to differ materially from those expressed or implied in the forward-looking statements and information and accordingly, readers should not place undue reliance on such statements and information. Although the Company believes, in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate, that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Company can give no assurance that they will prove to be correct. In evaluating forward-looking statements and information, readers should carefully consider the various factors which could cause actual results or events to differ materially from those expressed or implied in the forward looking statements and forward-looking information depending on, among other things, the risks that the one or both of the EPC Transactions will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities or that the parties determine not to proceed with one or both of such transactions) or that the BME offer will be completed in a manner outlined in BME's circular, as amended. The statements in this press release are made as of the date of this release. The Corporation undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of the Company, EPC, or their respective financial or operating results (as applicable).

The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from the U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.

All information contained in this press release relating to EPC was provided by EPC to Nordex for inclusion herein. Nordex has not independently verified such information and shall bear no liability for any misrepresentation contained therein.

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