TORONTO, July 27, 2020 – Optiva Inc. (“Optiva” or the “Company“) today commented on the announcement made by ESW Capital, LLC (“ESW“) disclosing an unsolicited and non-binding intention to offer to acquire any and all subordinate voting shares (the “Shares“) of the Company not owned by ESW or its affiliates at a price of Cdn. $60.00 in cash per Share (the “Indicative Offer“). ESW’s announcement makes clear that ESW would only pursue such Indicative Offer if, among other things, ESW receives an exemption from the mandatory minimum tender condition imposed under applicable Canadian securities laws that prohibits an offeror from acquiring shares under a take-over bid unless a majority of shares owned other than by the offeror (and its affiliates and joint actors) are tendered to such offer. Optiva is not aware of such an exemption ever having been granted by any Canadian securities regulator.
Optiva cautions its shareholders and potential investors that the Indicative Offer is non-binding on ESW, there can be no certainty that ESW will seek or obtain the exemption from the requirements of applicable Canadian securities laws that ESW has stated it requires in order to proceed with the Indicative Offer, and even if such exemption is obtained there can be no certainty that the Indicative Offer, or any other transaction involving the Shares, will be pursued, supported by Optiva’s board of directors (the “Board“) or ultimately completed.
As announced by the Company on June 26, 2020, Optiva previously received from ESW a preliminary, non-binding indication of a willingness to explore a possible acquisition of the Shares. While ESW’s announcement earlier today referred to its intention to pursue an acquisition of any or all Shares not owned by ESW or its affiliates, ESW has previously reserved its right to pursue a partial take-over bid under which ESW would offer to acquire only the minimum number of Shares necessary for ESW to own over 50% of the Shares on a fully diluted basis.
In response to ESW’s expression of interest, the Board constituted a special committee of independent directors (the “Special Committee“) on June 30, 2020 to, among other things, review and consider ESW’s proposal and the Company’s alternatives to such proposal and to oversee the preparation of a formal valuation by an independent valuator regarding ESW’s proposal. The Special Committee consists of Robert Stabile and Andrew Day.
Following its formation on June 30, 2020, the Special Committee made a number of customary and reasonable enquiries of ESW regarding its expression of interest, which the Special Committee considered were necessary to assess whether ESW’s alleged intention to make a take-over bid was bona fides and in good faith and whether ESW was likely to ever actually proceed in making a take-over bid that was capable of completion. ESW’s steadfast refusal to answer many of these enquiries, and certain other actions that ESW has recently taken involving Optiva, continue to be of concern to the Special Committee.
The Special Committee has made no decision regarding the Indicative Offer, and intends to carefully and thoroughly review the Indicative Offer. Following the Special Committee’s review, the Company will more fully respond to the statements made by ESW in its July 27, 2020 news release, should the Special Committee determine it is appropriate to do so.
The Company also announced today that, on the recommendation of the Special Committee, the Company has entered into a shareholder rights plan (the “Rights Plan“) effective today.
The Rights Plan is designed to ensure that all Optiva shareholders are treated fairly in connection with any take-over bid and to protect against “creeping bids”, which involve the accumulation of more than 30%, on an aggregate basis, of Optiva’s Shares through purchases exempt from applicable take over-bid rules.
Pursuant to the Rights Plan, one right attaches to each issued and outstanding Share. Subject to the terms of the Rights Plan, the rights become exercisable in the event that any person (together with certain related parties) becomes a beneficial holder of 30% or more of the outstanding Shares without complying with the “Permitted Bid” provisions under the Rights Plan. In such event, holders of the rights (other than the acquiring person and its related parties) will be permitted to exercise their rights to purchase additional Shares at a 50% discount to the then prevailing market price of the Shares.
While the Rights Plan is effective as of July 27, 2020, it is subject to ratification by Optiva’s shareholders and is subject to approval of the Toronto Stock Exchange. Optiva will be seeking shareholder ratification of the Rights Plan at its upcoming annual and special meeting to be held on August 18, 2020 (the “Meeting“). A summary of the principal terms of the Rights Plan will be included in the management proxy circular to be sent to shareholders in connection with the Meeting and a complete copy of the Rights Plan will be available under the Company’s profile on SEDAR at www.sedar.com. If the Rights Plan is not approved by the shareholders at the Meeting, it, together with the outstanding rights, will terminate and cease to be effective immediately following the Meeting.
About Optiva Inc.
Optiva Inc. is a global leader in providing CSPs with cloud-native revenue management software on the public cloud. CSP operators and mobile virtual network operators can integrate our best-of-breed charging engine into a BSS stack or deploy our fully managed, end-to-end, SaaS-based suite. Optiva solutions offer unmatched speed, scale, security and savings. Our market knowledge, analytical insights and unique Customer Success Program ensure telecoms are equipped to achieve their strategic business goals. Established in 1999, Optiva Inc. is on the Toronto Stock Exchange (TSX: OPT). For more information, visit www.optiva.wpengine.com.
Caution Concerning Forward-Looking Statements
This press release contains forward-looking statements and forward looking information within the meaning of applicable securities laws. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or describes a “goal”, or variation of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. There is no assurance that any forward-looking statements will materialize. Risks that could cause our results to differ materially from our current expectations are discussed in the Company’s annual information form dated March 9, 2020 and management’s discussion and analysis in respect of the three months ended March 31, 2020. The Company disclaims any intention or obligation to update any forward-looking statements, except as required by law, even if new information becomes available, as a result of future events or for any other reason.
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Optiva Responds to ESW’s Announcement of its Unsolicited and Non-Binding Intention to Pursue an Offer to Acquire Optiva’s Subordinate Voting Shares and Adopts Shareholder Rights Plan