[SatNews] Common share buyback is the plan...
MacDonald, Dettwiler and Associates Ltd. (TSX: MDA) intends to make a substantial issuer bid (the “Offer”), pursuant to which the Company will offer to purchase for cancellation up to $500 million in value of its outstanding common shares (“Shares”) from shareholders. The Offer will proceed by way of a modified “Dutch Auction” and the range of Offer prices will be $53.00 to $60.00 per Share (with increments of $0.50 within that range). The maximum purchase price under the Offer represents a premium of approximately 11 percent over the daily volume weighted average trading price of the Shares on the TSX for the prior 30 trading days.
The Company sold its Property Information Business in January 2011. The Board of Directors of MDA (the “Board”) has determined that the Offer is in the best interest of the Company and its shareholders and is the most equitable and efficient way to distribute up to $500 million to its shareholders while proportionately increasing the equity interest in the Company of shareholders who do not tender to the Offer. After giving effect to the Offer, the Company will continue to have sufficient financial resources and working capital to conduct its ongoing business and operations and the Offer is not expected to preclude MDA from pursuing strategic acquisitions, its foreseeable business opportunities or the future growth of the Company’s business.
The modified Dutch Auction tender process allows shareholders to individually select the price, within the specified range, at which they are willing to sell all or a portion of their Shares. When the Offer expires, MDA will select the purchase price (“Purchase Price”) which will be the lowest tendered price within the range of prices allowing it to buy up to $500 million of the Shares validly tendered to the Offer. All Shares tendered at or below the selected price level will be bought at the Purchase Price, subject to pro-ration in the event that the aggregate cost to purchase all the Shares (including the purchase of odd lots tendered) exceeds $500 million. All Shares tendered at prices higher than the Purchase Price will be returned to shareholders. The Company will fund any purchase of Shares pursuant to the Offer from available cash on hand. The Offer will be for up to approximately 23 percent of the total number of issued and outstanding common shares (based on a Purchase Price equal to the minimum purchase price per Share of $53.00 and 41,182,592 Shares outstanding on July 28, 2011).