SCOTTSDALE, Ariz., July 26, 2021 /PRNewswire/ -- Viavi
Solutions Inc. ("VIAVI") (NASDAQ: VIAV) is once again extremely
disappointed that Germain Lamonde,
EXFO Inc.'s (TSX: EXF) (NASDAQ: EXFO) ("EXFO") Chairman and
majority shareholder, and the EXFO Special Committee have rejected
our increased binding proposal (the "Binding Proposal") to acquire
EXFO for US$8.00 in cash per share.
VIAVI's increased Binding Proposal represents a significant premium
of:
- 116% to the NASDAQ closing price on June
4, 2021, the trading day before the announcement of the
going private transaction (the "Going Private Transaction") by Mr.
Lamonde;
- 33.3% to the US$6.00 per share
consideration offered under the Going Private Transaction; and
- 6.7% to VIAVI's previous already-superior proposal to acquire
EXFO.
Using his privileged vantage point as Executive Chairman and
controlling shareholder, Mr. Lamonde crafted an inadequate,
squeeze-out offer of US$6.00 per
share to EXFO minority shareholders, priced at the low end of the
US$5.75 to US$7.50 valuation range provided by the EXFO
Special Committee's own valuator, TD Securities Inc. As is now
evident by the EXFO Special Committee's rejection of VIAVI's
Binding Proposal, which is exceedingly more favourable from a
financial point of view than Mr. Lamonde's Going Private
Transaction, the fiduciary out protection contained in the form of
a "Superior Proposal" provision in the Arrangement is devoid of any
practical effect, in that it cannot lead to the conclusion of a
transaction that is more favorable to EXFO's shareholders.
Immediately following VIAVI's first, already-superior proposal,
Mr. Lamonde publicly rejected VIAVI's proposal, stating that he
would not consider any change of control transaction. He then
issued a coercive ultimatum to EXFO minority shareholders: either
accept his inadequate US$6.00 per
share offer or be forced to continue to hold EXFO shares which,
last traded at $3.70 prior to the
announcement of the Going Private Transaction on June 7, 2021, and could well return to that
trading level in light of Mr. Lamonde's refusal to consider a
value-maximizing transaction that would benefit all EXFO's
shareholders.
Similarly, the EXFO Special Committee, following Mr. Lamonde's
ultimatum, also publicly declined to engage with VIAVI.
Disappointingly, they continue to recommend Mr. Lamonde's lower
offer and, by refusing to engage with VIAVI, are now depriving
minority shareholders of an additional US$2.00 per share in value under VIAVI's Binding
Proposal – 33.3% higher than Mr. Lamonde's Going Private
Transaction.
Given the significant value and premium we are offering to all
EXFO shareholders, we would have expected the EXFO Special
Committee, consistent with their fiduciary duties, to work with us
to employ every effort to persuade Mr. Lamonde to accept our
Binding Proposal, or at the very least, ask Mr. Lamonde to engage
with us to see if a deal could be reached that would make sense for
all.
Instead, from what we can tell based on the EXFO circular, the
EXFO Special Committee has hardly negotiated with Mr. Lamonde. They
agreed to lower the projections EXFO management initially prepared
after Mr. Lamonde declared them to be "aggressive," and then
accepted only his second offer (which was $0.75 above his initial offer).
Shareholders deserve better and the EXFO Special Committee is
urged to take this opportunity to work with VIAVI to maximize value
for all shareholders in accordance with its fiduciary duty. It is
up to Mr. Lamonde and the EXFO Special Committee to explain why
they feel Mr. Lamonde's Going Private Transaction is better than
VIAVI's Binding Proposal which is US$2.00 per share or 33.3% higher. We do not
understand how the EXFO Special Committee could reasonably arrive
at this conclusion or continue to recommend and facilitate an
inadequate and coercive Going Private Transaction.
We also note that approval of the Going Private Transaction has
a "majority of a minority" approval component at the Special
Meeting of EXFO shareholders, which excludes all votes attached to
shares controlled by Mr. Lamonde. The Going Private Transaction
also requires court approval on the "fairness" of the transaction.
Completion of the inferior Going Private Transaction will not
provide EXFO's minority shareholders with the opportunity to
receive full and fair value for their investment.
VIAVI is committed to taking the necessary steps to ensure that
its superior Binding Proposal is evaluated on its clear and
strategic merits. The combination of VIAVI and EXFO would build a
leader in communications test and measurement for the next decade.
The strength of the combined teams and technology, combined with
significantly greater scale and financial resources, would enable
strong investment in growth while achieving greater operating
leverage than either company could do alone.
Advisors
Fried Frank Harris
Shriver & Jacobson LLP and McCarthy Tétrault LLP are
acting as U.S. and Canadian legal counsel to VIAVI, respectively.
Kingsdale Advisors is acting strategic shareholder and
communications advisor to VIAVI.
About VIAVI Solutions
VIAVI (NASDAQ: VIAV) is a global
provider of network test, monitoring and assurance solutions for
communications service providers, enterprises, network equipment
manufacturers, government and avionics. We help these customers
harness the power of instruments, automation, intelligence and
virtualization to Command the network. VIAVI is
also a leader in light management solutions for 3D sensing,
anti-counterfeiting, consumer electronics, industrial, automotive,
and defense applications. Learn more about VIAVI
at www.viavisolutions.com. Follow us on VIAVI
Perspectives, LinkedIn, Twitter, YouTube and Facebook.
Forward-Looking Statements
This press release contains
forward-looking statements including statements and expectations
regarding the Proposal, the strategic merits of a transaction
between EXFO and VIAVI, VIAVI's expectations regarding growth,
scale, financial resources and operating leverage, and VIAVI's
plans regarding EXFO's brand, legacy and operations. These
forward-looking statements involve risks and uncertainties that
could cause actual results to differ materially from those
projected. For more information on these risks, please refer to the
"Risk Factors" section included in the Company's most recent Annual
Report on Form 10-K filed with the Securities and Exchange
Commission on August 24,
2020 and our Quarterly Reports on Form 10-Q filed on
November 10, 2020, February 9, 2021 and May
7, 2021. The forward-looking statements contained in
this press release are made as of the date hereof and the Company
assumes no obligation to update such statements.
Additional Information
VIAVI is providing the
disclosure required under Section 9.2(4) of National Instrument
51-102 – Continuous Disclosure Obligations applicable to
public broadcast solicitations.
Any solicitation made by VIAVI will be made by it (directly or
on its behalf) and not by or on behalf of management of EXFO. All
costs incurred for any such solicitation will be borne by VIAVI.
VIAVI has entered into an agreement with Kingsdale Advisors
pursuant to which Kingsdale Advisors has agreed to provide certain
consulting and related services. VIAVI may solicit proxies in
reliance upon the public broadcast exemption to the solicitation
requirements under applicable Canadian corporate and securities
laws, including through press releases, speeches or publications,
and by any other manner permitted under applicable Canadian
corporate and securities laws. If VIAVI commences any solicitation
of proxies, proxies may be revoked by an instrument in writing by a
shareholder giving the proxy or by its duly authorized officer or
attorney, or in any other manner permitted by law. Neither VIAVI
nor, to its knowledge, any of its associates or affiliates, has any
material interest, direct or indirect, by way of beneficial
ownership of securities or otherwise, (i) in any matter proposed to
be acted upon in connection with the Going Private Transaction or
(ii) in any transaction since the beginning of EXFO's most recently
completed financial year or in or in any proposed transaction which
has materially affected or would materially affect EXFO or any of
its subsidiaries. Based upon publicly available information, EXFO's
head office is located at 400 Godin Avenue, Quebec, Quebec, G1M 2K2, Canada.
Inquiries:
Investors
Bill Ong
+1 (408) 404-4512
bill.ong@viavisolutions.com
Media (regarding the Proposal)
Hyunjoo Kim
+1 (416) 899-6463
hkim@kingsdaleadvisors.com
Media (all other inquiries)
Amit Malhotra
+1 (202) 341-8624
amit.malhotra@viavisolutions.com
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SOURCE VIAVI Financials
