Cossette will consider a new takeover offer from Cosmos Capital, but expects better offers from other buyers.
After initially offering $4.95 per share for the company in July, Cosmos said Wednesday http://www.marketingmag.ca/news/agency-news/cosmos-reaches-out-to-cossette-shareholders-with-increased-offer-11688 it would up its offer to $5.25 and take it directly to Cossette shareholders.
Soon after Cosmos tendered its offer in July, Cossette began a strategic review process to solicit other offers from third-party investors. On Oct. 16 Cossette issued an update on the process, saying it had received “several written expressions of interest from third parties… all of which are financially superior to the Cosmos proposal [of $4.95].” According to Cossette those offers are still better than Cosmos’ new offer.
In a release Thursday afternoon Cossette recommended shareholders “defer making any decision until its board of directors has had an opportunity to fully review Cosmos’ expected offer, compare it to the results of its strategic review process and make a formal recommendation as to the merits of that expected offer. All written expressions of interest regarding a potential acquisition of Cossette that were received by the company during the first phase of its strategic review process are financially superior to Cosmos’ intended bid of $5.25 per share.”
Cossette also pointed out that the offer represented a 9.5% discount from Cossette’s closing share price on Wednesday.
“The strategic review process is now at an advanced stage,” said Cossette. Potential buyers had conducted due business, financial and legal diligence and met with Cossette management.
However, the Quebec City-based agency network, the largest in Canada with offices around the world, also “cautioned” shareholders thatthis is no guarantee of a “definitive proposal.” And even if a proposal is made, “there is no assurance that such proposal will be recommended by the special committee or the board of directors or that such proposal will be implemented.”
A short advisory note from the National Bank’s Adam Shine, issued Thursday, said it “remains to be seen if other parties step up to the plate.
“While investors may be best served by allowing Cossette’s review process to imminently run its course, there’s no guarantee that a materially superior offer will be made for the company.”
