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Northstar Healthcare Issues Notice of Change in respect of Unsolicited Takeover Bid

^{Published on 2010-07-19 14:05:20 - Market Wire}
 

 Reasons why the Board has not Recommended Rejection of the Offer - The Offer of $0.95 per Share represents a premium of approximately 44% to the closing price of the Shares of $0.66 on the TSX on May 4, 2010, the last trading date prior to the announcement of the Offer, and a premium of 2.1% to the Shares' trailing 12-month weighted average trading price of $0.93. - The Fairness Opinion concludes that the consideration offered under the Offer is fair, from a financial point of view, to Shareholders. - Northstar may not be able to realize on the value of its claims against Dr. Kramer and his related entities on a timely basis, or at all. - Northstar is currently operating at a loss and its ability to continue as a going concern is uncertain. In addition, Northstar will be required to use all of its available corporate cash to make certain material payments in the event the Offer is successful. - There can be no assurances of future liquidity opportunities for the Shares if the Offer is not successful. - The Board of Directors does not expect a superior offer to emerge on a timely basis. Reasons the Board has not Recommended Acceptance of the Offer - The Offer is highly conditional to the benefit of Dr. Kramer. In total, there are 13 conditions, many of which, if not satisfied or waived, would permit Dr. Kramer to terminate the Offer virtually at will. - The Offer is coercive, in that its minimum tender threshold of only 50% +1, leaves Shareholders who may not wish to tender in the position of not knowing whether they will have a liquid market available to them after the Offer is completed (if it is completed) and also not knowing whether they will have a further opportunity to dispose of their Shares to Dr. Kramer once the Offer expires. - Dr. Kramer has timed his Offer so that it will expire prior to the expected date of resolution of Northstar's arbitration proceedings against him. This time frame denies Shareholders the opportunity to consider the outcome of those proceedings, as well as Northstar's developing circumstances, and make a reasoned and informed investment decision. Moreover, it could deny Shareholders the opportunity to benefit from a positive outcome to the arbitration. - The Board has been informed that, as of the date of the Notice of Change, none of the Directors or senior officers of Northstar has accepted or intends to accept the Offer. However, in the event the minimum tender condition is achieved and Dr. Kramer takes up a majority of the Shares, the Directors and senior officers of Northstar have indicated that they would consider tendering their Shares during the subsequent 10-business day extension period provided under the Offer. - Notwithstanding that the Board does not expect a superior offer to emerge prior to the expiry time of the offer, the Board and the Special Committee, together with Northstar's management, the Financial Advisor and legal advisors, are working to pursue a strategy to generate value for Shareholders. - Acceptance or non-acceptance may be appropriate for different Shareholders, depending on their individual circumstances. 

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