Loring Ward International Ltd. announced Friday the termination of the pending sale of the company to Werba Reinhard, Inc.
Werba Reinhard was to acquire all of the outstanding shares of Loring Ward for US$18 a share in cash.
One of the closing conditions of the transaction required that Loring Ward’s AUM/AUA not have declined by more than 20% from June 30 to Oct. 31, the closing date of the transaction.
As at the close of business on Oct. 27, AUM/AUA had declined by approximately 30%, due to the extraordinary global equity market declines of the past two months, Loring Ward said.
“While termination of the arrangement agreement is unfortunate,” stated David Rattee, chairman of the board and of the special committee of Loring Ward, “the company continues to experience positive operating cash flow, remains debt free, is in strong financial condition and will continue to seek to enhance shareholder value. Accordingly, while we see no strategic reason to do a transaction at this time, Loring Ward will continue to meet its responsibilities to shareholders by reviewing any offers.”
Despite Loring Ward’s efforts to renegotiate the agreement, the parties were unable to achieve mutually agreeable terms. Werba Reinhrd has expressed its belief that it is entitled to reimbursement of its expenses under the agreement’s termination provisions; however, Loring Ward disagrees with this position, and believes that it has claims against Werba Reinhard.
Loring Ward was previously known as Assante USA prior to the sale of Assante Corp. to CI Fund Management in August 2003 for $846 million.
Loring Ward calls off sale to Werba Reinhard
- By: IE Staff
- October 31, 2008 October 31, 2008
- 12:30