Falken Industries Ltd OTC: FLKI Retains Europe's Capprocon for Business Valuation Due Diligence
November 18 2010 - 9:15AM
Marketwired
Falken's (OTCBB: FLKI) Board Advisory Committee agreed today to
retain Capprocon, a European consulting firm specialized in
business valuations and due diligence efforts. The report will be
used in preparation for its recommendation to the Board and
Shareholders relating to an unexpected offer from Norex
International for a control stock position in FLKI at $ 1,50 per
share which the Committee believed "close but insufficient."
In order to best ensure shareholder interest, the due diligence
will be conducted and the analysis made independently of the
current status of Falken's complex purchasing and manufacturing
business and will include financial, operation, legal, human
resources issues, environment, licensing, assets ownership,
accounting policies used to highlight critical areas that may
require special attention by existing shareholders.
Manuel Garcia, Communications Officer for FLKI said: "It is an
utmost important step prior to management's decision on the matter
to avoid unpleasant business surprises in allowing control to pass
to Norex, no matter how friendly the relationship." Norex is an
important supplier and manufacturer of Falken's global product
conceptions.
The due diligence is independent of that being conducted by
Norex International and which is scheduled to be completed by the
end of the 1Q 2011. The Committee's approach will include common
valuation methods such as discounting future cash flows,
capitalizing earnings, and notably a market approach using
financial statistics of other comparable companies, market
multiples, comparable transaction and so-called Rule of Thumb
approaches. The diligence will also identify fixed, financial,
intellectual and other assets net of aggregate liabilities to
abstract a value of shareholders' equity to which redundant assets
will be added to the value of the going concern valuation.
Preliminary estimates by the Committee suggest a valuation of $
1,80- $2,00 per share for a control position, dilution issues
considered, provoking the need for an independent analysis before
deciding on the sufficiency of the Norex proposal at $ 1,50 per
share.
About Falken Industries Ltd:
Falken Industries Ltd OTC: 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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