Falken Industries Ltd Confirms Willingness to Consider and Evaluate NOREX Proposed Offer to Seek Control Position
October 20 2010 - 7:00AM
Marketwired
Falken Industries Ltd (OTCBB: FLKI) -
On several occasions in the past two years and continuing to the
present Falken management has been approached unofficially and
discretely by would-be merger or takeover suitors seeking an
expression of interest on the company's part - no formal letter
expressing an intention was ever received. The company has sought
the help of attorneys with expertise in such matters, in
determining how best to respond to the overtures of interested
parties and has acted accordingly.
Falken is aware, and the Falken board confirms that the interest
of the shareholders is the paramount concern. Consequently Falken
has always listened to would-be eventual proposals, and evaluated
on findings, whether the proposal was serious.
Falken continues to invest heavily in product innovation and
development; its product conceptions are globally received. Falken
outsources to associates and members of its production network
logistical, purchasing and manufacturing functions. A little more
than a year ago it agreed to invest the company's reserves and use
its borrowing power to acquire other manufacturers if such
acquisitions were in accord with the sound business judgment of the
board, and in the best interest of the company and its
shareholders. The company also confirmed that this would be a legal
way of coping with unfriendly takeover attempts.
The current Letter of Intent from Norex differentiates itself
from any prior dealings, in that it emanates from a member of
Falken's production network and though totally unexpected,
management does not view it as unfriendly. The offer is understood
to be for cash, a precious commodity which would act as a
"catalyst" for the development of Falken's own strategic planned
acquisitions.
Management is presently working to evaluate a thorough list of
options covering the advantages and disadvantages of entertaining
and cooperating with such an acquisition. After review and further
discussions with Norex, Falken's Executive Committee and Board will
decide if in light of the Company's plans for future development
and financial projections for the next three years, acquisition of
a control position in the Company by Norex would be advisable.
One of the matters to evaluate is whether a sale of control
could bring more than the $1.50 offered, or a public share exchange
with one of the major companies controlling the Company's
competitors.
Consideration will include issues of adequacy, and the best
interests of Falken Industries Ltd, its stockholders, its customers
and the communities which it serves.
Falken's directors and management have faith in the momentum of
the company, and currently believes that it is in the best
interests of its stockholders, customers and employees to take
advantage of this momentum and continue to implement the Company's
growth plans as an independent company. Whether such an environment
can be maintained after the sale of a controlling position to Norex
is of course a key issue.
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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