Canadian Solar holder Lion Point offers up to $250M to finance privatization bid
In a regulatory filing, Lion Point disclosed it holds a 6.0% stake in Canadian Solar and "continues to believe that the shares are significantly undervalued and trade at a steep discount to their intrinsic value" given the company's "high quality assets as well as the outstanding $18.47 per share acquisition proposal" made by Shawn Qu, the company's Chairman and CEO. "Following the public announcement of the Privatization Proposal, Lion Point had conversations with several large financial and strategic institutions that expressed an interest in potentially providing financing for the Privatization Proposal, and Lion Point subsequently submitted a preliminary term sheet, subject to due diligence and certain other conditions being met, including the participation of certain third party financing sources, to the Chairman offering to provide a 5-year financing package of up to $250M to i) backstop the sources of funds arranged by the Chairman for the Privatization Proposal and ii) to make additional funds available to increase the per Share price of the Privatization Proposal, if necessary. Lion Point has also indicated to the Chairman that, based on its discussions with certain financial institutions and strategic investors, it may be able to significantly increase the size of the offered financing subject to governance, diligence and other conditions. Lion Point has engaged and intends to continue to engage in discussions with the Issuer's management and Board, including the Special Committee of the Board formed to consider the Privatization Proposal, and its advisors regarding Lion Point's views on the Issuer and opportunities to enhance shareholder value, the composition of the Board and management, operational expense reductions, share repurchases, improved communication with public investors and strategic transactions, including a spin-off or separate listing of the Issuer's energy business or a sale of the Issuer as a whole or in parts," the filing stated.