ShawCor Enters Into Agreement With Its Controlling Shareholder To Eliminate Its Dual Class Share Structure

 ShawCor Enters Into Agreement With Its Controlling Shareholder To Eliminate
                        Its Dual Class Share Structure

  PR Newswire

  TORONTO, January 14, 2013

TORONTO, January 14, 2013 /PRNewswire/ --

(TSX: SCL.A ,  SCL.B )

ShawCor Ltd. (TSX: SCL.A, SCL.B) ("ShawCor" or the "Company") announced today
that the Board of Directors of ShawCor, after careful analysis, consideration
and advice from the special committee of independent directors (the "Special
Committee"), and advice from independent financial and legal advisors, has
unanimously approved and the Company has entered into a definitive agreement
with respect to a reorganization proposal negotiated by the Special Committee
with ShawCor's controlling shareholder (the "Controlling Shareholder"). The
Chair and the Vice-Chair abstained from voting on the transaction.

The proposed reorganization is to be implemented pursuant to a court-approved
plan of arrangement under the Canada Business Corporations Act . The
shareholders' meeting to consider the arrangement is expected to take place in
late March of this year. The arrangement will require a special resolution of
ShawCor shareholders approving the transaction in addition to approvals
required under applicable securities laws.

The arrangement also requires approval by the Ontario Superior Court of
Justice at a hearing to be held following the shareholders' meeting. If
approved, the arrangement is expected to close late in the first quarter of
2013 or early in the second quarter.

The Special Committee retained TD Securities Inc. ("TD Securities") to act as
its financial advisor and to provide an independent fairness opinion, and
received independent legal advice from Stikeman Elliott LLP. Kingsdale
Shareholder Services Inc. has been retained as proxy solicitation agent.

Terms of the Transaction

The reorganization proposal contemplates the elimination of ShawCor's dual
class share structure through the purchase of all of the Class A and Class B
shares of ShawCor by a newly formed Canadian corporation. The new corporation
would purchase all of the Class A shares of ShawCor in exchange for new common
shares on a 1:1 basis. The new corporation would also acquire all of the Class
B shares of ShawCor in exchange for a mix of new common shares and cash. The
consideration paid for the Class B shares of ShawCor will be $43.43 in cash or
1.1 new common shares per Class B share, such that 90% of the total
consideration will be paid in cash and 10% of the total consideration will be
paid in new common shares. At closing, a special dividend of $1.00 per share
would be paid on all remaining shares (the record and payment dates for such
dividend remain to be determined) and the new corporation and ShawCor would
amalgamate, under the name ShawCor Ltd. All issued and outstanding shares
would as a result be the same class of common shares.

The closing conditions of the reorganization proposal include, among others,
receipt of required ShawCor shareholder approvals, receipt of Toronto Stock
Exchange approval, receipt of court approvals, there being no material adverse
change in the affairs of ShawCor or applicable laws, and sufficient financing
being available to complete the transactions contemplated in the
reorganization. ShawCor's board would also retain a "fiduciary out" ability to
change its recommendation to shareholders.

Recommendation of the Board and the Special Committee

In approving the definitive agreement and making its recommendation that
shareholders (other than the Controlling Shareholder) vote in favour of the
reorganization proposal, the Board of Directors and the Special Committee
considered the fairness opinion prepared by TD Securities and a number of
other factors relating to the fairness of the reorganization proposal.

The factors relating to fairness considered by the Board and the Special
Committee included, among others, the following:

  *The reorganization transaction is expected to be accretive to ShawCor from
    an earnings per share perspective.
  *The premium to the current trading price and resulting dilution to Class A
    shareholders is within the range of precedents generally for similar types
    of transactions.
  *The Special Committee has received a fairness opinion from TD Securities
    that the consideration to be paid to the Class B shareholders pursuant to
    the Arrangement is fair, from a financial point of view, to the Class A
    and Class B shareholders, other than the Controlling Shareholder.
  *The elimination of the Class B shares may facilitate future change of
    control transactions following the completion of the transaction. It will
    also result in a widely held single class structure, and is expected to
    diversify ShawCor's shareholder base, as many investment mandates exclude
    investment in companies with dual class structures, and to increase
    liquidity and provide for enhancing financing flexibility going forward.
  *The transaction is subject to shareholder and court approval, and
    shareholders will be provided with dissent rights.
  *After completion of the transaction, all remaining shareholders will
    receive a $1.00 per share special dividend.

Notice to Investors

This news release is for informational purposes only and is not an offer to
buy or the solicitation of an offer to sell any securities.

Forward Looking Information

This document includes certain statements that reflect the Board's and the
Special Committee's expectations and objectives for the Company's future
performance, opportunities and growth, which statements constitute
forward-looking information under applicable securities laws. Such
statements, other than statements of historical fact, are predictive in nature
or depend on future events or conditions. Forward looking information involves
estimates, assumptions, judgments and uncertainties. These statements may be
identified by the use of forward-looking terminology such as ″may″, ″will″,
″should″, ″anticipate″, ″expect″, ″believe″, ″predict″, ″estimate″,
″continue″, ″intend″, ″plan″, ″ possibility″ and ″unlikely″, and variations of
these words or other similar expressions.

Forward looking information involves known and unknown risks and uncertainties
that could cause actual results to differ materially from those predicted by
the forward looking information. We caution readers not to place undue
reliance on forward looking information, as a number of factors could cause
actual events, results and prospects to differ materially from those expressed
in or implied by the forward looking information. Significant risks facing
the Company include, but are not limited to: changes in global or regional
economic activity and changes in energy supply and demand, which impact on the
level of drilling activity and pipeline construction; exposure to product and
other liability claims; shortages of or significant increases in the prices of
raw materials used by the Company; compliance with environmental, trade and
other laws; political, economic and other risks arising from the Company's
international operations; fluctuations in foreign exchange rates, as well as
other risks and uncertainties, as more fully described under the heading
"Risks and Uncertainties" in the Company's annual MD&A; as well as the
possible effects of a change of control or other significant transaction.

When considering the forward looking information in making decisions with
respect to the Company, readers should carefully consider the foregoing
factors and other uncertainties and potential events. The Company does not
assume the obligation to revise or update forward looking information after
the date of this document or to revise it to reflect the occurrence of future
unanticipated events, except as may be required under applicable securities
laws.

Additional Information

The foregoing description of the proposed transaction does not purport to be
complete and is qualified in its entirety by reference to the copy of the
definitive agreement entered into by ShawCor in respect of the reorganization
proposal, which will be available at http://www.sedar.com . ShawCor cautions
shareholders and others considering trading in securities of ShawCor that the
reorganization proposal is subject to certain material conditions, some of
which are beyond ShawCor's control, including shareholder and court approval,
and there can be no assurance that the transaction contemplated by the
reorganization proposal, or any other transaction, will be completed.

ShawCor Ltd. is an energy services company specializing in products and
services for the pipeline and pipe services and the petrochemical and
industrial segments of the oil and gas industry. The Company operates through
eight divisions with over seventy manufacturing and service facilities located
around the world.

For further information: Kingsdale Shareholder Services Inc, Call North
America toll-free: 1-877-657-5859 Banks and brokers call collect:
1-416-867-2272
 
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