Era warns against Kyknos liquidations

The Kyknos “saga” took on a new dimension yesterday, as both the two companies that had submitted rival bids for the investment company, reiterated their previous positions concerning their plans for the company. Sharelink Financial Services (SFS) has presented another reason why the withdrawal of its public offer for the acquisition of 30% to 100% of Kyknos be accepted, while Era has called upon Kyknos shareholders not to sell their holdings in the company at the current low share prices but to accept its offer for the acquisition of up to 50% plus one share in Kyknos.

SFS notes that by February 2, 2001, the deadline of its offer to Kyknos shareholders, it had not received enough “acceptance letters to secure a stake of at least 30% of the issued capital of Kyknos”. Therefore, even if the Supreme Court were to decide that the withdrawal of SFS’s public offer was illegal in light of the existence of a rival bid by Era, the public offer would still be invalid, as the response of shareholders was not sufficient to fulfill the conditions of the bid.

Era has called upon the Securities and Exchange Commission (SEC) to impose sanctions on SFS for non-compliance to a SEC order, according to which SFS had to submit a revised offer to Kyknos shareholders, offering them at least 121 cents in exchange for each of their shares. If these sanctions are imposed, it will open the way to many Kyknos shareholders to sell their shares and warrants to SFS at 121 cents and 40 cents respectively, according to Era. The portfolio investment company also calls upon shareholders to avoid liquidating their Kyknos shares on the principle that “if SFS controls more than 45% of Kyknos” and Era controls a further 35%, Era would have to buy at least 70% of the shares of each Kyknos shareholder in order to satisfy the terms of its bid that provides for the takeover of 50% plus one share in Kyknos.