Zuni Holdings Inc.
TSX VENTURE : ZNI.H

November 26, 2010 17:19 ET

Update on Merger With Pacific Safety Products Inc.

TORONTO, ONTARIO--(Marketwire - Nov. 26, 2010) - Zuni Holdings Inc. (TSX VENTURE:ZNI.H) ("Zuni") is pleased to give an update on its merger ("Merger") with Pacific Safety Products Inc. (TSX VENTURE:PSP) ("PSP") by way of a court approved plan of arrangement of Zuni under the Business Corporations Act (Ontario).

Merger with PSP

In furtherance of the Merger:

  • Zuni and PSP entered into an arrangement agreement as of November 17, 2010. The arrangement agreement may be viewed under Zuni and PSP's profiles at www.sedar.com. The arrangement provides for the exchange of Zuni shares for PSP shares on a one-for-one basis.
  • The joint management information circular for the meetings of PSP and Zuni shareholders to approve the Merger has been mailed to Zuni shareholders of record and has been filed with the Canadian provincial securities authorities. As indicated in the joint management information circular, the Board of Directors of Zuni has approved the Merger and recommends that Zuni shareholders vote in favour of the resolution approving the Merger at the meeting. Those meetings will be held in Arnprior, Ontario on December 22, 2010.
  • The arrangement must be approved by not less than two-thirds of the shareholders of Zuni voting at the Zuni meeting. Zuni shareholders holding approximately 35% of the outstanding Zuni shares have entered into voting agreements supporting the Merger. The issuance of PSP shares pursuant to the arrangement must be approved by a majority of the arms length shareholders of PSP voting on the resolution at the PSP meeting. PSP shareholders, including certain non-arms length shareholders, holding approximately 29% of the outstanding PSP shares have entered into voting agreements supporting the Merger (19% of which can be voted to approve issuance of PSP shares in furtherance of the Arrangement).
  • On November 18 2010, Zuni obtained an interim order from the Ontario Superior Court approving, among other things, the holding of a meeting of Zuni shareholders to consider the Merger. The hearing before the Ontario Superior Court of Justice to approve the plan of arrangement of Zuni to give effect to the Merger is scheduled for December 29, 2010.
  • In the event PSP shareholders and Zuni shareholders approve the Merger and the Ontario Superior Court approves the plan of arrangement of Zuni giving effect to the Merger, it is anticipated that the Merger would close on or about December 31, 2010.

Copies of the joint management information circular and the form of proxy are available on the Internet on the SEDAR website at www.sedar.com.

About Zuni

Zuni has no material assets other than cash on hand and restricted cash in escrow and no material business activities. Zuni is a reporting issuer in Ontario and Alberta and publicly trades under the symbol ZNI.H on the NEX board of the TSX Venture Exchange.

About PSP

The mission statement of Pacific Safety Products Inc. is ...we bring everyday heroes home safely™. PSP is an established industry leader in the production, distribution and sale of high-performance and high-quality safety products for the defence and security market. These products include body armour to protect against ballistic, stab and fragmentation threats, ballistic blankets to reduce blast effects, and protective products against chemical and biological hazards. PSP is the largest body armour manufacturer in Canada, directly supplying the Canadian Department of Defence, Federal Government Agencies and major Canadian law enforcement organizations. The Company also provides specialized law enforcement and safety products through APS Distributors, a division of PSP that services law enforcement and public safety agencies across the country. The Company, through its U.S. subsidiary Sentry Armor Systems Inc., provides body armour products to U.S. based law enforcement and private security firms. The Company also produces tactical clothing and emergency medical kits. Pacific Safety Products is a reporting issuer in British Columbia, Alberta and Ontario, Canada and publicly trades under the symbol PSP on the TSX Venture Exchange.

Financial and Legal Advisors

Klein Farber Corporate Finance Inc. provided fairness opinions in respect of the arrangement to the boards of directors of both PSP and Zuni. PSP's legal advisors are Farris, Vaughan, Wills & Murphy LLP and Zuni's legal advisors are Wildeboer Dellelce LLP.

Forward-Looking Statements:

Certain statements in this press release relating to the proposed Merger and the companies' business are "forward-looking statements" within the meaning of securities legislation. These statements include statements regarding completion of the Merger, the receipt of the Ontario Court's approval, the anticipated closing date, the resulting share ownership, the board and management composition upon completion of the Merger and anticipated benefits of the Merger to each company. The companies do not intend, and do not assume any obligation, to update these forward-looking statements. These forward-looking statements represent management's best judgment based on current facts and assumptions that management considers reasonable, that all necessary approvals will be obtained from the shareholders of Zuni and PSP, and that all third party regulatory and governmental approvals to the Merger will be obtained and all other conditions to completion of the Merger will be satisfied or waived. The companies make no representation that reasonable business people in possession of the same information would reach the same conclusions. Forward-looking statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. Many factors, including those discussed more fully elsewhere in this release and in documents which may be filed with applicable Canadian securities regulatory authorities and the TSX Venture Exchange could cause results to differ materially from those stated.

Contact Information

  • Zuni Holdings Inc.
    Daniel Marks
    Chief Executive Officer
    416.907.6908