Falken Industries Ltd Confirms Willingness to Consider and Evaluate NOREX Proposed Offer to Seek Control Position
Marketwire “Press Releases “
TRENTON, NEW JERSEY — (MARKET WIRE) — 10/20/10 — 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.