Intertape shareholders reject acquisition agreement

The shareholders of Intertape Polymer Group, a Montreal, Que-based packaging manufacturer, have rejected a bid by private equity firm Littlejohn & Co., LLC to acquire the company.

The arrangement was rejected by a vote of almost 70 per cent. Thus, Intertape Polymer noted that it had notified the other parties that the agreement has been terminated.

“We thank the many shareholders who voted at the meeting,” said newly-appointed board chairman Eric Baker. “The new Board of Directors will do everything it can to return Intertape Polymer to a strong financial position.”

Intertape made the announcement in May that Littlejohn would acquire the company’s outstanding shares at a price of US$4.76 per share. The deal was valued at approximately US$500 million, and included the companys outstanding debt.

“This transaction is also positive for our employees, customers and suppliers as Littlejohn is dedicated to continue to building on the strong market position of Intertape going forward,” said interim CEO H. Dale McSween when the deal was announced in May. The company also announced that McSween was no longer CEO of the company, but would serve on the new board of directors.

Under Canadian law, a transaction of this nature is subject to the approval of two-thirds of the votes cast by shareholders at a special meeting.

Intertape posted a dismal net loss of US$166.7 million in 2006, compared to net earnings of US$27.8 in 2005. The company also closed facilities in Piedras Negras, Mexico; Brighton, Col.; and Cap-de-la-Madeleine, Que.

“Intertape Polymer faced challenges at almost every level through 2006. Management has dealt and continued to deal with each issue proactively, to establish for improvement in 2007,” said then-board chairman Michael Richards during the announcement of the 2006 year-end results. “The series of corporate and operational events which characterized the past year were unprecedented in Intertape’s history.” Contributors to the lackluster performance included poor market conditions, volatile raw material costs, and the retirement of the company’s founder and CEO.