StockerYale Begins Takeover
SALEM, N.H., June 27, 2008 -- With Virtek Vision International Inc.'s largest shareholder on its side, StockerYale Inc. today announced it is beginning a cash takeover bid for the Waterloo, Ontario-based maker of laser engraving, templating and inspection products, which has twice rejected buyout overtures from cash-strapped StockerYale.
StockerYale, which makes structured light lasers, LED modules, and specialty optical fibers, said it will pay 65 cents, Canadian, for each share of Virtek stock, for a total of $22 million. That amount represents a 48 percent premium over the stock's price May 13, when StockerYale first made the buyout proposal by offering a combination of cash and its own shares (See: StockerYale Pursues Virtek).
The company said today that shareholders holding 17.5 percent of Virtek stock, including its largest shareholder, Howson Tattersall Investment Counsel Ltd., have already agreed to tender their shares. StockerYale needs to tender a minimum of 66.6 percent of Virtek shares for the takeover to be successful.
After Virtek rejected StockerYale's initial offer, StockerYale announced June 16 that it planned to still pursue the company, with or without the approval of Virtek's board (See:
StockerYale Talks Takeover). Virtek responded June 20, again rejecting the buyout offer, saying the $22 million offer was too low. Virtek also cited StockerYale's financial condition, proposed financing arrangements and stock price history among its reasons why the buyout would not be a good deal for Virtek shareholders.
StockerYale has operated at a loss for over a decade, posting a $2.2 million loss last quarter and having to borrow $2 million for operating capital. Its stock price and equity sunk low enough for it to be unable to meet the requirements of the Nasdaq Global Exchange, so it moved to the Nasdaq Capital Market, which has lower requirements. It still could be delisted altogether because its stock continues to be priced below $1.
For more information, visit: www.stockeryale.com