Falken Formally Rejects Unsolicited Bid for Control Position
07 Aprile 2011 - 3:30PM
Marketwired
Falken Industries Ltd. (OTCBB: FLKI) (http://www.falkenltd.com)
global player in vehicular and industrial product conceptions, the
most popular of which are those marketed under the Clean Plus®
brand (http://www.cleanplus.com) announced today that it had, after
completion of its due diligence, rejected the unsolicited offer for
control made by Norex International.
Manuel Garcia, Communications officer said, "Falken management
couldn't get comfortable with Norex' short-term forecasts, their
revised proposals which significantly undervalued the business of
Falken and most importantly its potential. Moreover, the dilutive
impact of Norex' insistence on the issue of more shares, to achieve
control was totally unacceptable and clearly not in the best
interest of existing shareholders. They simply would not take their
offer to the public markets," said Garcia.
"Norex' proposed price and consequential dilution significantly
undervalued the company, including the greater value obtainable
from the company's strategic plan, especially the value inherent in
the company's diversified and robust portfolio of marketed and
pipeline products," said Eric Garan of Caprocon a consulting firm
advising Falken on the matter.
The rejection which had been anticipated by the market in the
last several weeks sent FLKI shares tumbling 48% as short term
traders and their markets spooked at the loss of the prospect for a
quick gain. The decline is viewed by many as a buying opportunity
for investors.
Had Norex taken its offer to the public markets, it is believed
the board would likely have recommended the then take-over to
shareholders. However Norex was steadfast in its position that
control had to be obtained by the issue of new shares which would
have the effect of materially diluting the stock.
Garcia stated, "I have had a huge number of messages from
clients and suppliers who are pleased with the news. It is partly
about a fondness for Falken, but it is mostly about certainty."
The company will now press ahead with ongoing negotiations and
consider a supply contract bid from a Norex competitor which is
expected to lower cost for productions as much as 11%.
About Falken Industries Ltd:
Falken Industries Ltd (OTCBB: FLKI) is a diversified industrial
conglomerate that operates in Chemicals, Wet Wipe and Biodegradable
Technology. Falken Industries Ltd is the concept behind more than
160 products distributed through a network of global platforms and
the recipient of trade awards for innovations, biodegradability and
environmental and health quality standards.
SAFE HARBOR STATEMENT: This news release contains
"forward-looking statements" made pursuant to the safe harbor
provisions of the 1995 Private Securities Litigation Reform Act.
"Forward-looking statements" describe future expectations, plans,
results, or strategies and are generally preceded by words such as
"future," "plan" or "planned," "will" or "should," "expected,"
"anticipates," "draft," "eventually" or "projected." Such
statements are subject to risks and uncertainties that could cause
future circumstances, events, or results to differ materially from
those projected in the forward-looking statements, including the
risks that our products may not achieve customer acceptance or
perform as intended, that we may be unable to obtain necessary
financing to continue operations and development, and other risks.
You should consider these factors in evaluating the forward-looking
statements included herein, and not place undue reliance on such
statements.
Contacts: Falken Industries Ltd. Manuel Garcia Communications
Officer +1609 357 0316 mgarciafaure@falkenltd.com
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