Optimum Général Inc.

Optimum Général Inc.

November 09, 2007 13:22 ET

Optimum Group Proposes to Take Optimum General Private

MONTREAL, QUEBEC--(Marketwire - Nov. 9, 2007) - Optimum Group Inc. and Optimum General Inc. (TSX:OGI.A) announced today that Optimum Group has agreed to acquire, by way of an amalgamation between one of its wholly owned subsidiaries and Optimum General, all of the outstanding "Class A" Subordinate Voting Shares of Optimum General not owned by or subject to the direct or indirect control of Optimum Group, at a price of $5.15 per share in cash, representing a total consideration of approximately $2,250,000. After this procedure, Optimum General will be a wholly owned subsidiary of Optimum Group and the related parties of Optimum Group.

"The decision to take Optimum General private is an initiative of Optimum Group that will allow Optimum General to eliminate the direct and indirect costs associated with financial reporting, compliance and other continuous disclosure obligations applicable to public companies. Optimum General will therefore dedicate even more resources to management and business development," said Mr. Jean-Claude Page, President and Chief Executive Officer of Optimum General.

Added value for current shareholders

The price of $5.15 represents a premium of approximately 9.8% over the $4.69 closing price of the shares on the Toronto Stock Exchange (TSX) on November 8, 2007, the last day of trading prior to the public announcement of the proposed privatization of Optimum General, and a premium of approximately 9.8% over the volume-weighted average price of the shares on the TSX for the 30 trading days up to November 9, 2007. Optimum Group currently exercises direct and indirect control over 90.15% of the outstanding "Class A" Subordinate Voting Shares of Optimum General and 96.28% of outstanding shares of all classes of Optimum General.

Moreover, as announced earlier today, Optimum General has declared an eligible dividend of $0.115 per "Class A" subordinate voting share and "Class B" multiple voting share of the Company, payable on November 30, 2007, to shareholders of record as at November 22, 2007, this being prior to the effective date of the privatization.

Transaction terms

The terms and conditions of the transaction will be detailed in a proxy circular to be mailed to shareholders in connection with the required special shareholders' meeting to be held at the date indicated in the proxy circular. The transaction will be subject to approval by 66 2/3% of the votes cast by all of Optimum General's shareholders, as well as by 66 2/3% of the votes cast by the holders of "Class A" Subordinate Voting Shares of Optimum General, voting separately, and 66 2/3% of the votes cast by the holders of "Class B" Multiple Voting Shares of Optimum General, voting separately. Closing of the transaction, which is expected to occur in the fourth quarter of Optimum General's current fiscal year, will also be subject to customary closing conditions, including the absence of material adverse changes in Optimum General's operations and financial results. Optimum Group has sufficient liquidity to fund the consideration to be paid to minority shareholders of Optimum General.

Moreover, in accordance with applicable securities laws, Optimum General's board of directors appointed an independent director to consider the proposed transaction. The independent director retained Lavery, de Billy, L.L.P. to act as legal counsel and Ernst & Young LLP to act as independent evaluator. Ernst & Young has provided the independent director with a valuation report which indicates that the fair market value of the outstanding shares of Optimum General is in the range of $4.61 to $5.12 per share.

Based on Ernst & Young's conclusions, among other factors considered, the independent director has determined that the transaction is fair for the minority shareholders of Optimum General. The independent director has recommended the acceptance of the transaction to the Optimum General's board of Directors and following this recommendation, Optimum General's board of Directors has approved the transaction and authorized its submission to shareholders.

About Optimum General

Optimum General is a Canadian company that underwrites property and casualty insurance mainly in Canada through three subsidiaries: Optimum West Insurance Company (British Columbia, Alberta and the Yukon); Optimum Insurance Company Inc. (Quebec, Ontario, Manitoba, Saskatchewan, the Northwest Territories and Nunavut); and Optimum Farm Insurance Inc. (Quebec). The products of these subsidiaries are distributed through a vast network of independent insurance brokers. Optimum General is a member of Optimum Group.

About Optimum Group

Optimum Group is a privately owned international financial group active in property and casualty insurance, life reinsurance, life insurance, consulting, financial services and asset management. Founded in 1969 by Canadian actuaries, Optimum Group is active mainly in Canada, the United States and France.

Caution regarding forward-looking statements

This press release and related communications may contain forward-looking statements, including statements regarding the business and anticipated financial performance of Optimum Group and Optimum General. These statements are subject to a number of risks and uncertainties. Actual results may differ from results contemplated by the forward-looking statements. Such differences may be caused by factors which include, among others, global capital market activity, changes in government monetary and economic policies, changes in interest rates, inflation levels and general economic conditions, legislative and regulatory developments, competition and technological change. When relying on forward-looking statements to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and should not place undue reliance on such forward-looking statements. Neither Optimum Group nor Optimum General undertakes to update any forward-looking statements, oral or written, made by itself or on its behalf.

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