Gennum Increases Purchase Price to Acquire Tundra
Gennum Increases Purchase Price to Acquire Tundra
Tundra and Gennum Amend Arrangement Agreement
Ottawa, Ontario and Burlington, Ontario – April 17, 2009 – Tundra Semiconductor Corporation (TSX: TUN) and Gennum Corporation (TSX: GND) today announced that they have amended the terms of their previously announced arrangement agreement, entered into on March 19, 2009 (the "March 19 Arrangement Agreement"), providing for the acquisition by Gennum of all of the issued and outstanding common shares of Tundra ("Tundra Shares") by way of plan of arrangement (the "Arrangement"). Pursuant to the amendment, Gennum has increased the aggregate purchase price for all of the Tundra Shares from approximately Cdn.$86 million (based on Gennum's 5 day Volume Weighted Average Price ("VWAP") ended March 18, 2009) to approximately Cdn.$112 million (based on Gennum's 5 day VWAP ended April 16, 2009), representing an increase of approximately 31%.
Pursuant to the amendment, the consideration payable by Gennum for each Tundra Share will be, at the election of the holder, Cdn.$5.81 in cash or 1.1679 common shares of Gennum ("Gennum Shares") or a combination thereof, subject to pro ration. Previously, Tundra shareholders could elect to receive for each Tundra Share Cdn.$4.43 in cash or 1.1575 Gennum Shares or a combination thereof, subject to pro ration.
Based on 19,326,053 Tundra Shares currently outstanding, in aggregate a total of Cdn.$60 million in cash (which represents an increase of Cdn.$5 million to the amount payable under the March 19 Arrangement Agreement) and 10.5 million Gennum Shares (which represents an increase of 2.5 million Gennum Shares to the number of Gennum Shares issuable under the March 19 Arrangement Agreement) will be issued to holders of Tundra Shares.
Based on Gennum's 5 day VWAP of Cdn.$4.97 on the Toronto Stock Exchange ended April 16, 2009, the increased consideration values Tundra at Cdn.$5.81 per Tundra Share, assuming full pro ration, representing a 94% premium to Tundra's 5 day VWAP ending March 18, 2009. The Tundra Board of Directors (Mr. Shlapak, a member of the board of directors of each of Tundra and Gennum, did not participate in the decision), acting on the unanimous recommendation of the Special Committee of the Tundra Board of Directors (comprised of independent directors), has unanimously approved the Arrangement, as amended, and confirmed its determination that the increased purchase price payable to Tundra shareholders is fair and that the Arrangement, as amended, is in the best interests of Tundra, and continues to recommended that Tundra shareholders vote in favour of the Arrangement, as amended.
In the event that holders of Tundra Shares elect, in the aggregate, to receive more than the maximum total number of Gennum Shares, the number of Gennum Shares to be received by each holder of Tundra Shares who has elected to receive Gennum Shares will be reduced pro rata, with the balance of the purchase price for such Tundra Shares being paid in cash. In the event that holders of Tundra Shares elect, in the aggregate, to receive more than the maximum total amount of cash, the amount of cash to be received by each holder of Tundra Shares who has elected to receive cash will be reduced pro rata, with the balance of the purchase price for such Tundra Shares being paid in Gennum Shares. Assuming full pro ration, the result would be a purchase price payable by Gennum of Cdn.$3.10 in cash and 0.5433 of a Gennum Share for each Tundra Share.
The Arrangement, as amended, will remain structured as an arrangement under the Canada Business Corporations Act. The amended Arrangement continues to be subject to satisfaction of a number of closing conditions, including the receipt of required regulatory approvals (including of the Toronto Stock Exchange) and Court approvals and the approval of shareholders of Tundra holding at least two-thirds of the Tundra Shares represented at a special meeting of shareholders of Tundra to be held on May 8, 2009.
At the special meeting, Tundra shareholders of record as of 5:00 p.m. (EST) on April 8, 2009 will be entitled to vote in person or by proxy. The date of the special meeting, and those Tundra Shareholders entitled to vote thereat, has not been changed. As announced on April 16, 2009, Tundra has mailed to its shareholders a management proxy circular and other materials in connection with the special meeting, a copy of which is available under Tundra's profile at www.sedar.com.
If all necessary approvals are obtained and the conditions contained in the Arrangement Agreement, as amended, are satisfied, Tundra and Gennum continue to expect that the Arrangement, as amended, will close on or about June 1, 2009.
After closing of the amended Arrangement and assuming the issuance of an aggregate of 10.5 million Gennum Shares in consideration of its acquisition of the Tundra Shares, Gennum is expected to have approximately 45.9 million Gennum Shares issued and outstanding, with current Gennum shareholders owning approximately 77% and current Tundra shareholders owning approximately 23% of such issued and outstanding Gennum Shares. In addition, Gennum Shares continue to be issuable pursuant to the assumption by Gennum of stock options granted under the Tundra stock option plans.
The increase in the consideration payable by Gennum to acquire the Tundra Shares under the amended Arrangement results in corresponding amendments to the provisions of the March 19 Arrangement Agreement, and the plan of arrangement which is a schedule thereto, relating to Tundra RSUs, in-the-money stock options, out-of-the-money stock options and Gennum's assumption of Tundra stock options. Also, Gennum and Tundra have agreed to increase to Cdn.$5.0 million the termination fee payable by Tundra to Gennum in certain circumstances if the amended Arrangement is not completed. A copy of the amending agreement to the March 19 Arrangement Agreement will be available under Tundra's profile at www.sedar.com.
About Gennum
Gennum Corporation (TSX: GND) designs innovative semiconductor solutions and intellectual property (IP) cores for the world’s most advanced consumer connectivity, enterprise, video broadcast and data communications products. Leveraging the company’s proven optical, analog and mixed-signal products and IP, Gennum enables multimedia and data communications products to send and receive information without compromising the signal integrity. An award winner for advances in high definition (HD) broadcasting, Gennum is headquartered in Burlington, Canada, and has global design, research and development and sales offices in Canada, Mexico, Japan, Korea, Germany, United States, Taiwan, India and the United Kingdom. www.Gennum.com.
Gennum Media Contact:
Keri Fraser
Gennum Corporation
613-270-0458 x 2909
keri.fraser@gennum.com
Gennum Investor Relations Contact:
Gord Currie
Senior Vice-President, Finance & Administration and CFO
Gennum Corporation
(905) 632-2999 x3060
gord.currie@gennum.com
Caution Regarding Forward-Looking Information
This news release contains statements which constitute forward-looking statements. These forward-looking statements are not descriptive of historical matters and refer to management’s expectations or plans. These statements include but are not limited to statements concerning: Gennum’s plans and expectations relating to improvements in profitability and cash flow and the achievement of business model targets and levels, the reduction of corporate and operations costs and capital expenditures and marketing, sales and administration expenses; expected operational expense savings and estimated severance and related costs, and the estimated charges relating thereto and to impairments; and Gennum’s business objectives and future financial performance and prospects. Inherent in forward-looking statements are risks and uncertainties beyond Gennum’s ability to predict or control including but not limited to risks associated with: Gennum’s ability to complete the actions referred to in this news release within anticipated timeframes and to successfully realize the expected improvements therefrom; compliance with local employment legislation and requirements and the possible initiation and outcome of legal proceedings; and other risks facing Gennum’s business including competitive and pricing pressures and economic cycles in the semiconductor industry, fluctuations in foreign exchange rates and their potential adverse impact upon Gennum’s financial results, and Gennum’s ability to attract and retain key personnel necessary for its business. Please also refer to the sections entitled “Risks and Uncertainties” in Gennum’s 2008 annual report and “Risk Factors” in Gennum’s annual information form dated February 23, 2009. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this news release. Such statements are based on a number of assumptions which may prove to be incorrect including but not limited to the following assumptions: Gennum is able to successfully complete the actions referred to herein within the timeframe and with associated expense savings generally as anticipated and without unforeseen significant costs or delays; assumptions relating to severance and related costs and to charges; customer demand for Gennum’s products remains generally as anticipated; Gennum’s is able to execute its product roadmap without delays or disruptions having a material impact on Gennum; Gennum’s expectations relating to competitive pressures, including pricing pressures, are not materially incorrect; significant fluctuations in foreign exchange rates which significantly adversely affect Gennum’s financial results do not arise; and Gennum is able to continue to retain and attract technical and other key employees. Readers are cautioned that the foregoing list of important factors and assumptions is not exhaustive. Forward-looking statements are not guarantees of future performance. Events or circumstances could cause Gennum’s actual results to differ materially from those estimated or projected and expressed in, or implied by, these forward-looking statements. Consequently, readers should not place any undue reliance on these forward-looking statements. Forward-looking statements are provided for the purpose of providing information about management’s current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. In addition, these forward-looking statements relate to the date on which they are made. Gennum disclaims any intention or obligation to update or revise any forward-looking statements or the foregoing list of factors, whether as a result of new information, future events or otherwise, except to the extent required by law.





