2064818 Ontario Inc.

March 08, 2012 16:24 ET

Takeover Offer for Unique Broadband Systems Proceeds

Offeror Requisitions Shareholders' Meeting and Proposes Impressive, 100% Independent Slate of Directors, Extends Offer Expiry Time and Responds to UBS Directors' Circular

TORONTO, ONTARIO--(Marketwire - March 8, 2012) - On March 5, 2012, the Ontario Superior Court of Justice denied a motion brought by Unique Broadband Systems, Inc. ("UBS" or the "Company") to enforce a stay of proceedings against the $0.08 per share takeover offer (the "Offer") by 2064818 Ontario Inc. (the "Offeror") for up to 10,000,000 common shares of UBS ("Common Shares"). As a result of that ruling, the Offeror today announced the following items.

Requisition of Shareholders' Meeting to Elect a New UBS Board

In its circular for the Offer (the "Circular"), the Offeror stated its intention, during the course of or following completion of the Offer, to requisition a special meeting (the "Special Meeting") of the shareholders of UBS pursuant to the Business Corporations Act (Ontario) (the "OBCA") to elect a new board of directors for UBS.

Today, the Offeror and 6138241 Canada Inc. requisitioned the Special Meeting to (i) replace the current board of UBS; (ii) propose to shareholders the election of Messrs. Daniel Marks, Kenneth D. Taylor and Azim S. Fancy as new directors of UBS; (iii) pass a special resolution to increase the board of directors from three to four; and (iv) propose the election of Mr. Victor A. Wells as the fourth new director of UBS. These nominees are highly successful individuals with a wealth of business experience, as their biographies demonstrate:

Azim S. Fancy: Mr. Fancy is a successful entrepreneur and owner of diverse businesses with experience in all aspects of successful international business start-ups, planning and management. He has significant expertise in conducting feasibility studies and preparing financial projections focusing on recognizing strategic business opportunities. Mr. Fancy has an extensive network of Canadian and international affiliations, through his work in Europe, the Middle East, Africa, Asia, and North and South America. He also has a longstanding commitment to volunteerism and community development through membership on the Boards of Directors of several national and international not-for-profit organizations. He is currently Vice Chair of the Board of Governors of OCAD University and also serves as Chairman of Modus Business Solutions Inc.

Daniel Marks: Mr. Marks has been the Executive Chairman and Director of Pacific Safety Products Inc. since 2010. In that role, he has overseen the strategic turnaround of Canada's leading soft body armour company, through a process that involved the introduction of a new board and management team and ultimately orchestrating a merger with Zuni Holdings Inc. Mr. Marks also serves as the President and Principal of Stonehouse Capital Management Inc. He has over twenty years of investment management experience, including positions with Polar Securities Inc., Citibank, Republic National Bank of New York and TD Securities. Mr. Marks was previously a Director of MTI Global Inc. Mr. Marks holds a Chartered Financial Analyst (CFA) designation and an MBA earned at McMaster University.

Kenneth D. Taylor: Mr. Taylor enjoyed a long career as a diplomat in the Canadian Foreign Service with postings in Guatemala, Detroit, London, Pakistan, Iran and Canadian Consul-General in New York. He is best known as the Canadian Ambassador to Iran who, in 1980, risked his own life and his country's reputation to help save the lives of six American hostages during the Iran Crisis. Since leaving the foreign service, Mr. Taylor has worked extensively in the private sector, including five years as Senior Vice President at Nabisco Brands/RJR Nabisco. In his current role as Chairman of the consulting firm of Taylor and Ryan, he provides counselling on issues of political risk, international marketing and strategic accommodation with government. He is currently a director of Marsh Canada, Skylink Aviation Inc., Groundstar Resources and Norvista Resources.

Victor A. Wells: Mr. Wells was CFO of Chemtrade Logistics Income Fund from its IPO in 2001 until 2006 and also served as CFO of Tahera Diamond Corp. He is a member of Financial Executives International Canada, Chair of the Canadian Financial Executives Research Foundation and was formerly Chair of the Committee on Corporate Reporting. A member of the Accounting Standards Board, Mr. Wells currently serves as Chair of Audit Committee for GT Canada Medical Properties Inc. and a member of the Audit Committee for Student Transportation Inc. He has previously served as Chair of the audit committees of MagIndustries Inc., Northstar Healthcare Inc. and Canada Cartage Diversified Income Fund. Mr. Wells is a Fellow of the Institute of Chartered Accountants in British Columbia and Ontario, and obtained his Institute of Corporate Directors designation in 2007.

Should these individuals be elected as directors by the shareholders, they would bring to UBS the right combination of business experience and financial expertise as well as the highest level of integrity. Their election would represent the Company's foremost opportunity to preserve value in UBS and establish an organization that can build on the Company's assets.

Under the OBCA, UBS has until March 29, 2012 to call the Special Meeting. In the event UBS does not call the Special Meeting by that date, the Offeror is entitled to call the Special Meeting and intends to do so. UBS has previously informed the Offeror that it intends to block the holding of the Special Meeting. As such, it is unclear when the Special Meeting will be held. If UBS does not agree to the holding of the Special Meeting, the Offeror will be forced to make a motion before the Ontario Superior Court of Justice for the court's approval to hold the Special Meeting.

Extension of Offer Expiry Time

As a result of the uncertainty caused by UBS regarding the holding of the Special Meeting, the Offeror also announce today that it has extended the expiry date of the Offer. The Offer is now set to expire at 8:00 p.m. (Toronto time), May 11, 2012. All other terms of the Offer described in the Circular remain unchanged. The Offeror will mail to UBS's security holders and file on SEDAR a notice of extension of the Offer.

Response to UBS Directors' Circular

In its circular dated February 24th, 2012 (the "Directors' Circular"), the board of directors of UBS recommended that UBS's shareholders reject the Offer. The Directors' Circular contained a number of reasons for shareholders to reject the Offer, including the following.

  1. "The Offer is coercive as Shareholders will potentially remain as minority shareholders in a company that will be effectively controlled by Mr. Dolgonos and has increased risk of no equity value."

The reality: If the maximum number of Common Shares is tendered to the Offer, shareholders other than the Offeror and 6138241 Canada Inc. will hold approximately 68% of the outstanding Common Shares. Each director nominee proposed for election at the Special Meeting will be an independent director according to applicable laws. These highly capable directors will work to improve the value of the Common Shares.

  1. "Mr. Dolgonos is acting in his own personal interest and has a direct conflict of interest relative to the majority of Shareholders, given that he is pursuing more than $8 million of claims against UBS."

The reality: UBS's assertions are unsupportable and not based in fact. The proposed new independent directors of UBS are high quality individuals who will act in the best interests of UBS.

  1. "The Dolgonos Offer, being a partial take-over bid for less than 10% of the UBS Shares, is highly opportunistic and disadvantageous to Shareholders. The Dolgonos Offer does not provide Shareholders with a true exit opportunity, yet provides Mr. Dolgonos with effective control of UBS at minimal cost."

The reality: The Offeror will buy up to 10,000,000 Common Shares at $0.08 per share on a pro rata basis. Shareholders that tender will be able to realize a substantial premium price on shares purchased under the Offer, while also being able to participate in the future value of their residual UBS shares under the proposed new independent directors.

  1. "Since the stated purpose of the bid is to replace the Board of Directors, the Dolgonos Offer cannot be properly assessed without an articulation of Mr. Dolgonos' strategy for the future direction of UBS including with respect to the resolution of the DOL Claims."

The reality: Mr. Dolgonos is proposing a slate of directors that are highly qualified and motivated to see UBS emerge from the CCAA process with the court's approval and preserve and enhance the Company's value. The current board's articulated strategy is to continue litigation and liquidate the Company. UBS's shareholders have been given two very different visions for the future of the Company.

  1. "The Dolgonos Offer takes advantage of Shareholders by offering to purchase UBS Shares at a "premium" to a market price that has been devalued as a direct result of the DOL Claims."

The reality: The actions of UBS's current board have precipitated UBS's current condition. Only a new board of directors can change the Company's situation, for the benefit of all shareholders.

  1. "The Dolgonos Offer is highly conditional and cannot be considered to be a firm offer due to the unreasonable and discretionary nature of its conditions that allow 206 Ontario, in its sole discretion, not to proceed."

The reality: The terms and conditions of the Offer are standard and reflect the nature of UBS's assets.

Should shareholders have any questions about the Offer or how to tender, they can contact Phoenix Advisory Partners, the Information Agent for the Offer, toll-free at 1-800-622-1603 or by email at: inquiries@phoenixadvisorypartners.com.

This press release does not constitute an offer to buy or an invitation to sell, or the solicitation of an offer to buy or invitation to sell, any of the securities of Unique Broadband Systems, Inc. Such an offer may only be made pursuant to an offer and take-over bid circular filed with the securities regulatory authorities in Canada.

Forward-looking Information

Certain statements in this press release are forward-looking statements and are prospective in nature. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. These statements generally can be identified by the use of forward-looking words such as "may", "should", "will", "could", "intend", "estimate", "plan", "anticipate", "expect", "believe" or "continue", or the negative thereof or similar variations. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Important factors that could cause actual results to differ materially from the expectations of the Offeror include, among other things, the failure to meet certain conditions of the Offer and changes in law. Such forward-looking statements should therefore be construed in light of such factors, and the Offeror is not under any obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact Information

  • Philip Koven
    (416) 579-6255