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BORALEX INC. OFFER FAILING AND PROPOSED SQUEEZE-OUT ILLEGAL

^{Published on 2010-08-26 05:20:43 - Market Wire}
 

MONTREAL, Aug. 26 /CNW/ - Boralex Inc. ("Boralex") (TSX:BLX) has again failed to improve their offer for Boralex Power Income Fund (the "Fund") (TSX: BPT.un) in a meaningful manner, and their proposal to squeeze-out units of the Fund on a second step should they be successful in the bid appears to be illegal. They are now proposing as little as $2.00 cash and the remainder in the form of a convertible, unsecured, subordinated debenture, likely to trade at values well below $3.00, yet they could increase the bid to fair value that is well over $6.00 per unit. The proposed squeeze-out of non-tendering unitholders by amendmend to the Trust Agreement of the Fund is illegal as it cannot be forced upon investors under the terms of the Trust Agreement and Quebec law. O'Leary Funds Management LP, which manages investment funds owning approximately 9.9% of the units of the Fund, WILL NOT TENDER to this revised offer and believes that investors will be better served if they DO NOT TENDER and if they WITHDRAW TENDERED UNITS.

"Boralex continues to play games with investors rights and savings. Unless we receive an acceptable proposal by 5 pm Monday, we will take legal action against Boralex to protect the rights of investors, and enforce the existing requirement of 90% investor acceptance of any takeover offer prior to any squeeze-out on non-tendering unitholders. Boralex must be forced to respect the rights of unitholders of the Fund, and pay fair value for the units owned by investors, which we believe is well above $6.00 per unit.  Unitholders seeking fair value should NOT TENDER, and should WITHDRAW TENDERED UNITS" said Connor O'Brien, the CEO of O'Leary Funds and Chief Investment Officer, Stanton Asset Management Inc.

Davies Ward Phillips & Vineberg LLP, legal counsel to O'Leary Funds, by letter delivered yesterday to Boralex, the Fund, Computershare Trust Company of Canada and CDS Clearing and Depository Services Inc., confirmed O'Leary Funds' intention to commence legal action to enforce the Funds' Trust Agreement, which provides that no unitholder that refuses to accept Boralex's bid may have their units compulsorily acquired unless 90% of the units of the Fund held by the offerees to whom the bid was made are tendered into the bid. As described further in O'Leary Funds' press release of August 25, any attempt to circumvent the fundamental and important minority protections in the Trust Agreement and deprive retail investors and other minority unitholders of their continuing interest in the Fund is unreasonable, abusive and would be contrary to Quebec law.

HOW TO WITHDRAW TENDERED UNITS: Unitholders who have tendered into Boralex's bid are urged to contact their advisor, investment dealer, broker or other nominee for assistance to withdraw any Fund units which they have previously deposited pursuant to the Offer. Withdrawals of Fund units deposited must be effected via CDS Clearing and Depository Services Inc., Customer Service 416-365-8400 ([ www.cds.ca ]). A notice of withdrawal of Fund units deposited must actually be received by the depositary in a manner such that the depositary has a written or printed copy of such notice of withdrawal. The withdrawal will take effect upon actual physical receipt by the depositary of the properly completed notice of withdrawal. For further information please consult section 7 of the Offer to Purchase in the original offer dated May 18, 2010. Unitholders wishing to dispose of their Fund units are urged to do so through the Toronto Stock Exchange to gain immediate liquidity for their units.