Welland, Ontario-based Lakeside Steel, a pipe manufacturer for the oil exploration industry, received a takeover offer from an unnamed buyer on Tuesday. The offer was for $0.40 cash per common share--a significant premium over the $0.07 per common share Lakeside Steel's stock was trading at on Monday. At $0.40 per common share, the takeover bid is valued at $77.5 million.
In a press release, Lakeside said it has executed a non-binding letter of intent with a "strategic purchaser" regarding the offer. According to Lakeside, the offer is subject to the completion of due diligence by no later than January 9, 2012, a definitive agreement between the two parties and other agreements with Lakeside's directors, Jaguar Financial Corporation and certain other significant shareholders to support the acquisition.
There is no guarantee that a definitive agreement will be executed by the "strategic purchaser" and Lakeside or that the proposed offer will be made to shareholders or on what terms, but Lakeside has agreed to provide the purchaser with an exclusivity period until January 9, 2012, in order to complete due diligence and to enter into a definitive agreement during which period Lakeside will not solicit or respond to competing offers.
Additionally, in light of the executed letter of intent, Lakeside said that it will not proceed at this time with both the $22.5M loan with Romspen Investment Corporation and the associated $7.5M private placement financing led by Northern Securities Inc. which was announced by the Company on November 30, 2011.