Cossette Accepts Mill Road's Increased Bid

The Board of marcoms and ad group Cossette - which owns Nucleus and Impact Research in Canada, and Miles Calcraft Briginshaw Duffy in the UK - has accepted an increased cash offer from US private equity firm Mill Road Capital for C$8.10 per share.

Cosmos, which has been attempting to acquire Cossette since July, recently upped its own offer to C$8.10 per share (US $1 = C$1.06), but Cossette's Board reaffirmed its support for its sale to Mill Road, which then matched the Cosmos price.

Under the terms of the amended merger agreement, Mill Road will acquire all the issued and outstanding shares of Cossette, other than a portion held by certain senior executive shareholders. Should the deal not close, Cossette will be liable to fork out a C$4.5m termination fee to Mill Road.

The increased all-cash consideration of C$8.10 per share values the firm at around C$135.3m. It also represents a premium of approximately 150% over the share price of C$3.25 on the last trading day in July, prior to Cosmos announcing its unsolicited bid of C$4.95 per share.

'We are pleased with the increased consideration under the Mill Road transaction,' stated Jean Lavigueur, Chairman of the Special Committee of the Board of Directors of Cossette. 'The Board of Directors and its Special Committee remain committed to maximizing value for shareholders while acting in the best interests of Cossette.'

The amended offer was approved unanimously by the Board of Directors of Cossette (with interested directors Claude Lessard and Pierre Delagrave, abstaining).

A special general meeting of Cossette shareholders is to be held on Friday December 18, 2009: the firm's Board is recommending shareholders vote in favour of the amended Mill Road transaction and reject Cosmos's most recent offer.

According to press reports, should Mill Road take control of the company, Claude Lessard would keep his Chairman title but relinquish day-to-day control to younger managers.

Cossette shares closed up a penny at C$8.02 on the Toronto Stock Exchange yesterday.

Web site: www.cossette.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.