Cascal Files Schedule 14d-9 In Response To Unsolicited Sembcorp Tender Offer To Purchase All Shares

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2nd June 2010, 06:42am - Views: 845






Business Company Cascal N.V. 2 image










MEDIA RELEASE PR39795


Cascal Files Schedule 14D-9 in Response to Unsolicited Sembcorp Tender Offer to

Purchase All Shares of Cascal N.V.


LONDON, June 2 /PRNewswire-AsiaNet/ --


    The Board of Directors Unanimously Recommends that Stockholders (other

  than Biwater) Reject the Offer and NOT Tender Their Shares into the Offer


    Highlights of 14D-9 Filing:


    -- Offer undervalues the shares based on the Company's historical

financial performance and future operational and strategic opportunities


    -- Board of Directors believes that Biwater agreed to sell the Biwater

stake as a result of Biwater's significant financial distress due to pressure

exerted by its principal lender, HSBC, which also acted as its financial

advisor in negotiating the sale to Sembcorp


    -- The Board of Directors' commitment to exploring strategic alternatives

to maximize stockholder value of the Shares for the benefit of stockholders,

including seeking a superior alternative to the Offer, which may include a

business combination of the Company with third parties or other strategic or

financial alternatives that could deliver higher stockholder value than the

Offer


    Cascal N.V. (NYSE: HOO) (the Company) announced today that that it has

filed a Schedule 14D-9 Solicitation/Recommendation Statement with the

Securities and Exchange Commission (the "SEC"), in response to an unsolicited

tender offer (the "Offer") by Sembcorp Utilities PTE Ltd and Sembcorp

Industries ("Sembcorp"), to purchase all shares of Cascal N.V. at a purchase

price of $6.75 (or $6.40 , if certain conditions of the Offer are not

met) net per share in cash, without interest, upon the terms and conditions

set forth in the Offer to Purchase dated May 21, 2010 ("Offer to Purchase")

and in the related Letter of Transmittal (which, together with the Offer to

Purchase and any amendments or supplements thereto, collectively constitute

the "Offer") contained in the Schedule TO filed by Sembcorp (the "Schedule

TO") with the SEC on May 21, 2010.


    At a meeting held on May 30, 2010, following a discussion among the

independent members of the Board of Directors and advice from its financial,

strategic and legal advisors, the Board of Directors, by unanimous vote (with

Directors D. Lawrence Magor and Adrian White recusing themselves due to

Biwater's interest in the Offer), determined that the Offer was inadequate to

the holders of shares other than Biwater and not in the best interests of the

Company's stockholders. It is the Board's belief that the Offer undervalues

the Shares based on the Company's historical financial performance and future

opportunities.


    The Board of Directors recommends that stockholders reject the offer and

not tender their shares into the Offer. The Board further recommends that

stockholders that have tendered their shares into the Offer, withdraw their

shares. In addition, it recommends that if shares are held through a broker

or nominee, stockholders should instruct their broker to register the shares

in the name of the stockholder.


    "Cascal's position on the Sembcorp tender offer remains unchanged -- that

it is inadequate and not in the best interest of stockholders. The offer

grossly undervalues the strength and consistency of Cascal's historical

operational and financial results and the fact that management has

successfully and consistently executed our plan to grow both organically and

through strategic acquisitions," said Michael Wager, spokesperson for Cascal.

"It should also be noted that we have reached out to Sembcorp on three

separate occasions in the last month to negotiate improved terms for

stockholders, only to have them refuse to come to the table. In light of

Sembcorp's actions, we are actively holding discussions and negotiating

strategic alternatives that we hope can result in a superior transaction for

stockholders of Cascal. "


    In reaching the conclusion that the Offer is inadequate and not in the

best interests of Cascal's stockholders, and in making the recommendations

set forth above, the Board of Directors consulted with management of the

Company and the Company's financial, strategic and legal advisors and took

into account numerous factors, including, but not limited to, the following:


    -- The Board of Directors belief that the Offer price is inadequate and

       substantially undervalues the Company.


    -- The Board of Directors belief that Biwater agreed to sell the Biwater

       Stake as a result of the significant financial distress of Biwater and 

       BHL and as a direct result of pressure exerted by its principal lender, 

       HSBC, which also acted as its financial advisor in negotiating the sale 

       to Sembcorp.


    -- The fact that by insisting on Biwater's commitment to tender and not 

       withdraw the Biwater Stake pursuant to the Tender Offer and Stockholder 

       Support Agreement, Sembcorp has attempted to prevent other potential 

       bidders from proposing a superior transaction.


    -- The fact that by announcing that Sembcorp intends to delist and

       deregister the Shares, Sembcorp is attempting to force the Company's

       stockholders to make the unfair choice between tendering into a 

       two-tiered, undervalued tender offer or holding their Shares in the 

       face of Sembcorp's announced intention to seek delisting and 

       deregistration, thereby eliminating both a future market for the Shares 

       and information to be filed with the SEC.


    -- The Board of Directors' commitment to exploring strategic alternatives

       to maximize stockholder value of the Shares for the benefit of 

       stockholders, including seeking a superior alternative to the Offer, 

       which may include a business combination of the Company with third 

       parties or other strategic or financial alternatives that could deliver 

       higher stockholder value than the Offer. The Company has received 

       indications of interest from third parties with respect to possible 

       business combination transactions involving the Company since the Offer 

       was commenced at higher consideration per Share to stockholders.


    -- The fact that the Offer, if successful, could preclude Cascal from

       consummating an alternative transaction that could provide superior 

       value to the Company's stockholders. In order to afford the Company an 

       opportunity to explore strategic alternatives, the Board of Directors 

       has considered and may implement a number of defensive actions against 

       the Offer.


    -- On May 30, 2010, Janney Montgomery Scott LLC ("Janney"), the Company's

       financial advisor, rendered an oral opinion to the Board of Directors, 

       which was subsequently confirmed in writing, to the effect that, as of 

       that date and subject to certain assumptions and qualifications, the 

       Offer consideration of $6.75 (or $6.40) per Share in cash was 

       inadequate from a financial point of view to the stockholders of the 

Business Company Cascal N.V. 3 image

       Company (specifically excluding Biwater, as to which no view was 

       expressed).


    The Company's 14D-9 filing is available on the SEC's website,

http://www.sec.gov. In addition, the 14D-9 filing, this press release and

other information related to its dispute with Sembcorp can be accessed from

the section titled "Sembcorp Hostile Bid," the navigation atop the Company's



    Janney Montgomery Scott LLC is serving as financial advisors, and Squire,

Sanders & Dempsey LLP and Stibbe N.V. are serving as legal counsel to Cascal

and its Board of Directors.


    About Cascal N.V.

    Cascal provides water and wastewater services to its customers in eight

countries: the United Kingdom, South Africa, Indonesia, China, Chile, Panama,

Antigua and The Philippines. Cascal's customers are predominantly homes and

businesses representing a total population of approximately 4.7 million.


    SECURITY HOLDERS SHOULD READ CASCAL N.V.'S SOLICITATION/RECOMMENDATION

STATEMENT BECAUSE IT CONTAINs IMPORTANT INFORMATION. INVESTORS MAY OBTAIN THE

RECOMMENDATION AND OTHER FILED DOCUMENTS FREE OF CHARGE AT THE COMMISSION'S

WEB SITE (http://www.sec.gov) AS WELL AS DIRECTLY FROM CASCAL N.V. BY

CONTACTING JEFFREY GOLDBERGER, KCSA STRATEGIC COMMUNICATIONS, 880 THIRD

AVENUE, NEW YORK, NEW YORK 10022, +1 212.896.1249, JGOLDBERGER@KCSA.COM.



    Forward-looking statements

    This release contains forward-looking statements that are not guarantees

of future performance. There are important factors, many of which are outside

of our control, that could cause actual results to differ materially from

those expressed or implied by such forward-looking statements including:

general economic business conditions, unfavorable weather conditions, housing

and population growth trends, changes in energy prices and taxes,

fluctuations with currency exchange rates, changes in regulations or

regulatory treatment, changes in environmental compliance and water quality

requirements, availability and the cost of capital, the success of growth

initiatives, acquisitions and our ability to successfully integrate acquired

companies and other factors discussed in our filings with the Securities and

Exchange Commission, including under Risk Factors in our Form 20-F for the

fiscal year ended March 31, 2009, filed with the SEC on July 1, 2009. We do

not undertake and have no obligation to publicly update or revise any

forward-looking statement.



    Investor Contacts:                     Media Contact:

    KCSA Strategic Communications          KCSA Strategic Communications

    Jeffrey Goldberger / Marybeth Csaby    Lewis Goldberg

    +1 212.896.1249 / +1 212.896.1236      +1 212.896.1216

   

jgoldberger@kcsa.com /

     mcsaby@kcsa.com                       lgoldberg@kcsa.com



SOURCE: Cascal N.V.


    CONTACT: Investor Contacts,

             KCSA Strategic Communications,

             Jeffrey Goldberger, 

             +1 212-896-1249, 

             jgoldberger@kcsa.com 

 

             or Marybeth Csaby,

             +1-212-896-1236,

             mcsaby@kcsa.com, 


Business Company Cascal N.V. 4 image

             or Media Contact, 

             Lewis Goldberg, 

             KCSA Strategic Communications, 

             +1 212-896-1216, 

             lgoldberg@kcsa.com


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