AYLMER, Ont. – Amtelecom Income Fund’s board of trustees has urged its unitholders to reject a hostile takeover bid filed last month by Bell Aliant Regional Communications.
In a trustees circular to be mailed today, the board was unanimous in its rejection and told its shareholders it is actively looking for other bids.
"Amtelecom and its financial advisor are engaged in discussions with a number of parties which have expressed an interest in considering alternative transactions involving the Fund. As well, a number of parties have entered into confidentiality agreements and will be granted access to confidential data. The Board of Trustees is pursuing these initiatives with the objective of maximizing value to all Amtelecom unitholders," says today’s press release.
"The Board of Trustees has carefully reviewed and fully considered the Bell Aliant offer and the recommendations of the Special Committee of Independent Trustees. The Special Committee recommended to the Board of Trustees that Amtelecom unitholders reject the Bell Aliant offer and not tender their units to Bell Aliant," says the release.
"Amtelecom’s financial advisor, CIBC World Markets Inc., has provided an opinion that the consideration pursuant to the Bell Aliant Offer is inadequate, from a financial point of view, to the Fund’s unitholders other than Bell Aliant. The full text of this opinion is included in the Trustees’ Circular."
Amtelecom units traded yesterday at $13.30. The Bell Aliant bid is for $13.
The board says Amtelecom is well-positioned to deliver substantial value to unitholders in the future and it the press release cited several reasons in its circular (www.sedar.com) for its recommendation:
* The Bell Aliant Offer is inadequate. On March 11, 2007, CIBC World Markets Inc. provided an opinion to the Special Committee and the Board of Trustees to the effect that, as of that date and subject to the assumptions, limitations and qualifications set out therein, the consideration offered to Unitholders pursuant to the Bell Aliant Offer is inadequate, from a financial point of view, to Unitholders other than Bell Aliant. Additionally, the implied premium of the Bell Aliant Offer does not reflect an adequate premium for control of the Fund. Heavy trading volumes by sophisticated institutional investors in the Units at prices above $13.00 per Unit demonstrates that these investors believe the Bell Aliant Offer does not reflect full value for the Fund.
* The Bell Aliant Offer does not reflect the value of the Fund’s strategic acquisitions and recent initiatives. The Fund is well positioned to deliver substantial value to Unitholders in the future. The timing of the Bell Aliant Offer is opportunistic and does not reflect the intrinsic value to Unitholders of the Fund’s recent strategic acquisitions and planned strategic initiatives The Bell Aliant Offer was made before the market was aware of the Fund’s strong financial performance in its December 31, 2006 year-end results.
* The structure of the Bell Aliant Offer means Unitholders will not benefit from future growth or expected synergies. Bell Aliant’s opportunistic offer, if completed, would mean Unitholders will not benefit from future growth or expected significant synergies resulting from the combination of Bell Aliant and the Fund.
* Superior proposals delivering greater value for Unitholders may emerge. The Fund and its financial advisor, CIBC World Markets Inc., are actively soliciting superior alternatives to the inadequate Bell Aliant Offer.
* The Bell Aliant Offer is not a "permitted bid" under the Fund’s Unitholder Rights Plan. Although it could have, Bell Aliant has not made a Permitted Bid under the provisions of the Rights Plan, which is designed to protect Unitholder interests.
*The Bell Aliant Offer is highly conditional and not a firm offer. The subjective conditions of the Bell Aliant Offer give Bell Aliant the option of not proceeding with the Offer.
* The Bell Aliant Offer is opportunistic and disadvantageous to Unitholders. The Bell Aliant Offer was made opportunistically to take advantage of temporary market events to attempt to acquire the Fund at an inadequate price.
* The Bell Aliant Offer is coercive and forces Unitholders to give up rights. The Bell Aliant Offer is coercive to Unitholders who will lose control over the affairs of the Fund before their Units are paid for.
* Rejection of the Bell Aliant Offer by all of the Fund’s Trustees and Senior Officers. The Trustees and senior officers have not accepted and do not intend to accept the Bell Aliant Offer.
Amtelecom is the local telephone service provider to several regions in southwestern and central Ontario currently providing services through approximately 26,900 residential and business access lines. The Fund also provides cable television service to approximately 8,800 subscribers and Internet services to approximately 13,000 subscribers.
