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Freewest Resources Questions and Answers About the Inadequate All-Share Offer From Noront Resources for All Outstanding
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MONTREAL, QUEBEC, Nov 02 (MARKET WIRE) --
The Board of Directors of Freewest Resources Canada Inc. (TSX VENTURE:
FWR) wishes to provide Freewest shareholders with questions and answers
regarding the unsolicited all-share offer by Noront Resources Ltd. for
the outstanding shares of Freewest. These questions and answers can also
be found on Freewest's website at www.freewest.com.
- Should I accept or reject the Noront offer?
The Freewest Board of Directors unanimously recommends that Freewest
shareholders REJECT the Noront offer and NOT TENDER their Freewest
shares. Members of the Freewest Board of Directors and Freewest's senior
officers ARE NOT tendering their Freewest shares to the Noront offer,
which the Board of Directors views as offering inadequate consideration
to Freewest shareholders.
- How do I reject the Noront offer?
You do not need to do anything. Simply DO NOT tender your Freewest shares.
- What is the Freewest Board of Directors doing in response to the Noront
offer?
The Freewest Board of Directors has established a Special Committee of
independent directors which, along with the Board of Directors, is
actively working to evaluate a range of strategic alternatives to enhance
value for Freewest shareholders. Discussions are underway with third
parties with a view to exploring alternative value-maximizing
transactions.
- Why does the Freewest Board of Directors believe that the Noront offer
should be rejected?
The Freewest Board of Directors believes that the Noront offer fails to
provide full value for Freewest and is an attempt by Noront to acquire
Freewest without offering adequate consideration to Freewest
shareholders. The Board of Directors' reasons include:
-- The Board of Directors believes that the Noront offer fails to
adequately compensate Freewest shareholders for the strategic value of
Freewest's assets.
-- The Board of Directors believes that the timing of the Noront offer is
opportunistic and disadvantageous to Freewest shareholders.
-- Noront does not have a strategy focused on chromite.
-- The Board of Directors believes that the Noront offer does not reflect
an adequate premium for control of Freewest.
-- As at the date of Freewest's Directors' Circular (October 27, 2009),
the consideration offered under the Noront offer represented a discount
to the then-trading price of Freewest shares.
-- The value of the consideration offered under the Noront offer is
uncertain and entirely dependent on the value of Noront's shares, which
are subject to significant fluctuations.
-- It may be difficult for Freewest shareholders to dispose of Noront
shares.
-- Superior proposals or other alternatives may emerge.
-- Freewest's financial advisor - CIBC World Markets Inc. - has provided
a written opinion dated October 27, 2009 that, as of the date of such
opinion, the consideration offered under the Noront offer is inadequate,
from a financial point of view, to Freewest shareholders.
-- The Noront offer is highly conditional.
-- The Noront offer is not a "Permitted Bid" under Freewest's Shareholder
Rights Plan.
-- Freewest has a track record of creating value for Freewest
shareholders.
A summary of all of the reasons for the unanimous recommendation of the
Freewest Board of Directors is set out on pages 4 to 11 of Freewest's
Directors' Circular.
- What are some of the significant conditions of the Noront offer?
The Noront offer is highly conditional; some of the most important
conditions are as follows:
-- There being validly deposited under the Noront offer Freewest shares
representing not less than 66 2/3% of the total outstanding Freewest
shares (calculated on a fully-diluted basis).
-- The Freewest Shareholder Rights Plan being waived, invalidated or
cease traded.
- What happens if not all of the Noront conditions are satisfied?
Unless all of the conditions of the Noront offer have been satisfied or
waived by Noront prior to the expiry of the Noront offer, Noront will not
have any obligation to take up and purchase Freewest shares tendered to
the Noront offer, and Noront can withdraw the Noront offer. If the Noront
offer is withdrawn, none of the Freewest shares will be purchased by
Noront.
- This has been referred to this as a "hostile" take-over bid. Is that
true?
YES. In a friendly take-over, the two companies work together to reach an
agreement that enhances shareholder value. In this case, Noront chose to
launch the Noront offer without first reaching an agreement with
Freewest's Board of Directors. As a result, the Noront offer is a
"hostile" offer and the Freewest Board of Directors is determined to
consider alternatives to enhance value for Freewest shareholders.
- My broker advised me to tender my Freewest shares. Should I?
NO. The Freewest Board of Directors has unanimously recommended that
Freewest shareholders REJECT the Noront offer and NOT TENDER their
Freewest shares.
You should be aware that Noront may engage soliciting dealers and that
Noront may agree to pay brokers for Freewest shares tendered to the
Noront offer.
- Do I have to decide now? Is there any advantage to tendering my
Freewest shares early?
NO. You do not have to take any action at this time and you obtain no
advantage by tendering your Freewest shares early. The Noront offer is
scheduled to expire on November 18, 2009. Given that the Freewest Board
of Directors is considering alternatives to enhance shareholder value,
the Board of Directors recommends that you not take any action until
closer to this date, to ensure that you are aware of all options
available to you.
However, if you have already tendered your Freewest shares to the Noront
offer and you decide to withdraw these Freewest shares from the Noront
offer, you must allow sufficient time to complete the withdrawal process
prior to the expiry of the Noront offer. Contact your broker or Freewest
at the number set out below.
- Can I withdraw my Freewest shares if I have already tendered?
YES, you can withdraw your Freewest shares at any time until your
Freewest shares have been taken up and paid for by Noront, or if your
Freewest shares have not been paid for by Noront within three business
days after being taken up by Noront, or under certain other circumstances
described in the Noront offer.
- How do I withdraw my Freewest shares?
Withdrawal of Freewest shares deposited under the Noront offer must be
effected by notice of withdrawal and must be physically received by
Noront's depositary, Equity Transfer & Trust Company, within the required
time limits.
We recommend that you contact your broker or Freewest at the number set
out below for further information on how to withdraw your Freewest shares.
- Who do I ask if I have more questions?
The Freewest Board of Directors recommends that you read the information
contained in the Freewest Directors' Circular, which is available on
Freewest's website at www.freewest.com. Please contact Freewest with any
questions or requests for assistance that you may have.
Freewest is a well-financed mineral exploration company. It is actively
exploring for gold, base-metals and chromite within eastern Canada.
Corporate information can be accessed on the Internet at
www.freewest.com. Freewest's shares are listed on Tier 1 of the TSX
Venture Exchange under the symbol FWR.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
Contacts:
Freewest Resources Canada Inc.
1155 University Street, Suite 1308
Montreal, Quebec, H3B 3A7
Toll Free: 1-888-878-3551
(514) 878-4427 (FAX)
E-mail: info@freewest.com
Website: www.freewest.com
AGORACOM Investor Relations
FWR@Agoracom.com
http://agoracom.com/ir/freewest
Copyright 2009, Market Wire, All rights reserved.
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