Royal Group announces a Secondary offering of shares being made
concurrently in the United States and in all provinces of Canada.
Royal Group Technologies Limited (TSE/NYSE/ME: "RYG") announced today that it
has filed registration statements with the Securities and Exchange Commission
in the United States and preliminary prospectuses with the various securities
commissions in Canada relating to subordinate voting shares of Royal. The
filings relate to a secondary offering of subordinate voting shares and to an
offering of debentures exchangeable into capital stock "DECS". (DECS is a
service mark of Salomon Brothers Inc.)
An underwritten secondary offering is being made to currently sell 2.2
million subordinate voting shares which will be issued by Royal upon the
exercise of options previously granted by the Company to its management and
employees. Such options will vest in Royal's first fiscal quarter. The
secondary offering will also include an additional 1.3 million subordinate
voting shares being offered for sale by certain of Royal's founding
partners, including Mr. Vic De Zen, Royal's Chairman of the Board, Chief
Executive Officer and President (plus 525,000 subordinate voting shares being
offered by the Company solely to cover over-allotments).
Under the DECS offering, 2,850,000 subordinate voting shares (plus 427,500
subordinate voting shares solely to cover over-allotments) will be delivered
in the United States principally by Mr. Vic De Zen, and including certain of
the Company's other founding partners and executive management, to a DECS
Trust under forward purchase agreements. These agreements provide for the
delivery of the shares, or, at the selling shareholder's option, the
equivalent value in cash, to the DECS Trust in the year 2000. Until they are
delivered to the Trust, the shares subject to the forward purchase agreements
will continue to be owned by the selling shareholders with all rights,
including full voting rights, being for the benefit of the selling
shareholders. The selling shareholders will also retain an interest in any
future appreciation in the value of such shares until the delivery date in
the year 2000.
Vic De Zen commented on his participation in the transactions stating that
his sale and transfer of shares is being made for estate planning purposes,
while allowing him to retain the voting rights and an interest in any future
appreciation in the value of those shares subject to the DECS offering.
Following the proposed offerings and assuming delivery of the maximum number
of shares to the Trust upon maturity, Vic will continue to own more than 15.5
million multiple voting shares of Royal representing 18% of its equity and
82% of the total votes.
The secondary offering and the DECS offering are expected to commence in late
October. Salomon Brothers Inc will lead, and Goldman Sachs & Co.,
ScotiaMcLeod Inc., Merrill Lynch & Co., and Smith Barney Inc. will co-manage
the underwritten secondary offering, while Salomon Brothers Inc. will
underwrite the DECS offering.
In the United States, registration statements relating to these securities
have been filed with the Securities and Exchange Commission but have not yet
become effective. These securities may not be sold nor may offers to buy be
accepted prior to the time the registration statements become effective. In
Canada, a preliminary prospectus has been filed with all of the provincial
securities commissions with respect to the secondary offering. These
communications shall not constitute an offer to sell or the solicitation of
an offer to buy nor shall there be any sale of these securities in any state
or province in which such an offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any such
state or province. When available, copies of the preliminary prospectuses
relating to the offerings may be obtained from the Company upon request.
Royal Group Technologies Limited is one of North America's largest extruders
of vinyl building products, with extensive vertical integration. Its Building
Products Group focuses on custom profiles (windows & doors, fencing &
decking, and recently, garage doors), vertical window blinds, siding and
pipe. Its Building Technologies Group focuses on The Royal Building
System(TM) (for residential, commercial, industrial and institutional
purposes) and product lines derived from the System including foundations,
garages and sheds. Royal's manufacturing facilities are primarily located in
North America, but recently facilities have been added in Italy, Argentina
and Colombia, and a plant is well under construction in China. Additional
site plans include Poland and the Philippines.
For more information, please contact:
Gary J. Brown,
Executive V.P. and Chief Financial Officer
Royal Group Technologies Limited
Phone: (905) 264-0701, Facsimile: (905) 264-0702 |
