CALGARY, July 7 /CNW/ - The previously announced agreement between Nevada
Bob's Golf Inc. ("Nevada Bob's Golf") (TSE:NBC) and Birdie Holdings, Ltd.
("Birdie"), a London-based media, advertising and Internet company, has been
cancelled and the parties have negotiated a new, revised agreement, which
agreement is to be signed imminently.
The original deal between Birdie and Nevada Bob's Golf, announced in May,
2000, focused on Birdie providing an infusion of cash and television
advertising new air time on CONFAB for Nevada Bob's Golf, the world's largest
specialty golf retailer. The new arrangement does not involve North American
broadcast time, nor an injection of cash, but gives Birdie international
rights for franchising and marketing in certain other countries. In return,
Birdie has agreed to develop a certain number of stores starting this year and
to pay a one per cent royalty on all sales to Nevada Bob's Golf.
"The deal to provide extensive advertising air time for Nevada Bob's Golf
could not be reconciled because we were not able to utilize the advertising
air time to our best advantage. Therefore it had significantly less value to
our North American assets," said Martin Bunting, Executive Vice President and
Chief Operating Officer. "But both sides are very excited about the new
opportunity created, and going forward with the revised deal. We are extremely
confident in Birdie Holdings as a great marketing company that will help
significantly grow the Nevada Bob's brand globally."
In an additional deal, the finalization of which is also expected
shortly, the majority shareholder of Nevada Bob's Golf, RCA Investments No. 4,
Ltd. ("RCA") is to provide cash and debt relief to Nevada Bob's Golf through:
- An infusion of cash in the amount of $5,000,000 US into Nevada Bob's
Golf by in exchange for debentures convertible into Nevada Bob's Golf
common stock and warrants to purchase common shares; and,
- The conversion of debt by RCA in the amount of $16,630,000 US through
the issuance of additional common shares and warrants of Nevada Bob's
Golf and other consideration.
"We are delighted our largest shareholder continues to hold this high
degree of confidence in Nevada Bob's strategy for growth," said Bunting.
Nevada Bob's Golf suffered heavy losses during a year of intense
reorganization that included several mergers and the acquisition of U.S.-based
Nevada Bob's Pro Shops, Inc. out of U.S. Chapter 11 bankruptcy protection.
This reorganization has resulted in the consolidation of the worldwide rights
to the "Nevada Bob's" brand, as well as to the operations of the "Nevada
Bob's" franchise system.
The imminent closing of an additional transaction, with Sheridan Reserve
Incorporated, will also boost Nevada Bob's Golf's working capital. Under the
agreement, Sheridan will be granted a license to operate Nevada Bob's Golf e-
commerce business worldwide, with the exception of the United Kingdom and
Europe. In consideration of granting this license, Nevada Bob's Golf is to
receive $7,000,000 US in the form of $4,000,000 US in cash and 2,000,000
shares of Sheridan valued at $3,000,000 US.
"Establishing a strong e-tail portal will enable the company to
capitalize on Nevada Bob's brand name recognition and assist us in
strengthening our brand with the new medium of Internet users," said Bunting.
"It will also allow us to incorporate advertising and generate additional
revenue."
The Nevada Bob's Golf e-commerce site will maintain close ties to the
retail outlets. Customers will have the option to pick up or return items
purchased on the Internet at their neighborhood store to avoid additional
hidden costs.
"The electronic commerce abilities will add value to the retail
franchises and we'll use a variety of methods to draw people to both Nevada
Bob's experiences," Bunting said.
Sheridan has completed much of the preliminary work necessary to launch
and test the NevadaBob's.com site and to be ready for the coming Christmas
season.
Nevada Bob's Golf Inc.'s corporate offices are located in Calgary,
Alberta, Canada. The Company s stock trades under the symbol "NBC" on the
Toronto Stock Exchange.
This news release may include comments that do not refer strictly to
historical results or actions and may be deemed to be forward-looking
statements. Forward-looking statements involve risks and uncertainties
including, but not limited to, the weather and performance of the economies in
the markets in which the company operates, continued acceptance of the company
s products, competitive factors, the company s ability to identify and
interpret retail trends, volatility of prices, market compensation and risk
inherent in the company s international operations. The Toronto Stock Exchange
has neither approved nor disapproved of this release.
-0- 07/07/2000
For further information: Martin Bunting, Executive Vice President and Chief Operating Officer, Nevada Bob's Golf Inc., (403) 217-2342; Larry Clausen, President, Communication Incorporated/Shandwick, 1-877-332-6092 or (403) 266-2000 |
