Dye & Durham dissident abandons co-operation deal

Executive Summary

• Dye & Durham Ltd. provided an update on its ongoing strategic review, which includes considering the sale of all or part of the company, asset sales, recapitalizations, or mergers.
• The company is engaged in litigation against Mr. Proud and Plantro Ltd. after Plantro sought to abandon a previously signed co-operation agreement and published statements the company claims were misleading regarding financial leverage and future prospects.
• CIBC Capital Markets has withdrawn as the financial adviser for the strategic review, and the company is currently engaging a new financial adviser.

Key Details

• Strategic Review Scope: The board's strategic committee is reviewing alternatives to maximize shareholder value, including a potential sale of the company, asset sales, recapitalizations, or potential mergers.
• Litigation Context: The legal action stems from Plantro's attempt to unilaterally withdraw from a co-operation agreement. The company moved to enforce its legal rights to protect the bargain defined in that agreement.
• Counterparty Actions: Plantro withdrew its proposal and published statements concerning the company's financial leverage and future prospects, which Dye & Durham characterizes as misleading and harmful to the strategic review.
• Adviser Change: CIBC Capital Markets has decided not to proceed as the financial adviser. The strategic committee is in the process of engaging a new financial adviser.
• Settlement Conditions: Dye & Durham stated it would be willing to settle litigation against Mr. Proud and Plantro if they unequivocally reaffirm their commitment to the July co-operation agreement, abide by its terms, and respect the principles of a fair and transparent strategic review.
• Committee Leadership: The strategic committee is chaired by independent director and Plantro Ltd. nominee David Danziger.

Notable Quotes

• "The strategic committee of the board of directors... is committed to and remains actively engaged in the review of strategic alternatives to maximize value for all shareholders."
• "Despite the actions taken by Plantro, the company would be willing to settle its litigation against Mr. Proud and Plantro if they unequivocally reaffirm their commitment to the bargain struck in July, abide by the co-operation agreement, and respect the principles of a fair and transparent strategic review."