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Norsat Receives Sweetened Offer from China´s Hytera Communications
Monday 19 June 2017

19 June 2017 - The bidding war for Canadian communication solutions provider Norsat International Inc. (TSX: NII) (NYSE MKT: NSAT) continued last week, with suitor Hytera Project Corp. a subsidiary of Chinse radio systems maker Hytera Communications Co., Ltd, making a sweetened, USD 11.50 per share bid for Norsat just after being informed of a sweetened, likely superior rival bid from US-based Privet Fund Management LLC.

Norsat said that a special committee comprising all of the independent directors of its board, in consultation with the company's legal and financial advisors, received, reviewed and considered an offer from Hytera to amend the terms of an existing amended arrangement agreement between the companies.

The amended offer is to acquire the company for cash consideration of USD 11.50 per share and to increase both the Norsat and Hytera termination fees from USD 2.5m to USD 3m, respectively.

A previously adjourned annual general and special meeting of securityholders, which is scheduled to resume on 22 June, remains unchanged.

Norsat said its independent directors have determined that based on the amended offer from Hytera, the Privet subsequent acquisition proposal ceases to be a superior proposal, and subject to obtaining approval from the Industrial Technologies Office representing the Strategic Aerospace and Defence Initiative programme will enter into a further amendment of the amended arrangement agreement and implement the amended offer.

Last week, Privet sweetened its offer for Norsat to USD 11.50 per share in its ongoing bidding war with Hytera.

This was a competing offer to the former, amended offer proposed by Hytera, under which Hytera would acquire all the issued and outstanding shares of Norsat for USD 11.25 in cash per share.

Norsat's board had previously deemed Hytera's bid to be a 'superior proposal', and had scheduled a 22 June shareholder vote on the Hytera deal.

Here's the history:

Norsat first reported interest from Privet, and others, last September. Privet originally offered to acquire the company for cash consideration of USD 8.00.

Currently, Privet holds or controls around 17.6% of the outstanding common shares of Norsat.

Norsat was then trading at around CDN 7.82, and has a market cap of around CDN 45.09m (USD 34.15m). By this March it was trading at USD 10.75/share, with a market cap of USD 63.55m.

However, on 27 March, Norsat announced it had entered into a definitive agreement with Hytera, under which Hytera would acquire the company for USD 10.25 per share in cash.

Privet then sweetened its offer to USD 11/share.

Norsat delivered written notice to Hytera of the determination of the independent directors. Hytera had a period of five business days to offer to amend the terms of the Arrangement Agreement. The Chinese company countered with its sweetened offer.

In mid-May, the board of Norsat determined that a buyout offer from US-based Privet to acquire the company for cash consideration of USD 11.00 per share was superior to an existing deal the company has with Hytera.

Hytera then raised its bid to USD 11.25 in cash per share. This was deemed superior to the Privet offer.

Last week, Privet came forward with its USD 11.50 per share offer, which Norsat said is not subject to any due diligence or financing conditions.

That offer has now been matched by Hytera.
Date Published: 19/06/2017
Target: Norsat International
Country: Canada
Deal Size: 73m (USD)
Sector: Telecommunications
Type: LBO
Financing: Cash
Status: Bidding
Buyer: Hytera
Hytera matches latest Privet bid