HONG KONG, Sept. 15 /PRNewswire/ -- SWA Reit and Investments Ltd. ("SWA" - SWA.VI) announces corporate changes and liquidation.
On July 7, 2008, our shareholders approved a merger with Mass Financial Corp. ("Mass") by way of an asset-for-share swap agreement ("the Agreement"). The merger has been completed and the company will be liquidated to eliminate ongoing expenses. A shareholders' meeting was convened on September 12, 2008 and approved the liquidation.
The record date for shareholders to receive the proceeds is September 12, 2008 ("Record Date"), at the end of the business day.
The number of Mass shares to be received by SWA was determined under the terms of the Agreement which required an independent evaluation and a fairness option. As a result thereof, the shareholders of SWA on the Record Date will be entitled to receive one Mass share for every seventeen SWA Austrian Deposit Certificates ("ADC's"), SWA shares held, subject to final administrative details.
The following premise, among others, was taken into account in the evaluation: In acquisitions between publicly traded companies, the market prices of the merging companies must be considered. In the case of SWA and Mass the weighted average of their daily closing prices prior to the companies' merger agreement indicate a market-to-market ratio of 9.1 to 9.7 SWA shares for each 1.0 Mass share. However, this calculation does not recognize Mass' significant cash and short-term securities position which was, as of their June 30, 2008, reporting USD$288 million.
SWA's cash position is poor, on the contrary, and the company requires a raising of capital, likely in the form of an equity placement as market conditions for new debt issuance have significantly deteriorated as a result of the global credit crisis.
Taking into account all circumstances, the valuation has presented calculations that would justify exchange ratios within a range of 18.5 to 21.5 SWA shares for each 1.0 Mass share. Had the calculations included Mass's improved operating results in 2008 prior to the merger with SWA, the range of exchange ratios would be higher.
SWA has withdrawn its quotation for its ADC's from the third market of the Vienna Stock Exchange as of September 9, 2008.
North America Contact: Rene Randall
Tel: 1 (604) 408 8538
Fax: 1 (604) 683 3205
Email: rrandall@bmgmt.com
SOURCE SWA Reit and Investments Ltd.
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