Optiva Reiterates Recommended Ratification of Shareholder Rights Plan to Protect Shareholders Against Creeping Bids or Other Opportunistic or Coercive Actions that Harm Shareholder Interests

TORONTO, Aug. 10, 2020 – Optiva Inc. (“Optiva” or the “Company”), acting on the unanimous recommendation of its independent Special Committee, today re-iterated its recommendation that all shareholders vote in favour of the Company’s shareholder rights plan (the “Rights Plan”) at the upcoming annual and special meeting of the Company’s shareholders to be held on August 18, 2020 (the “Meeting”).

The Rights Plan does not inhibit any party from making a take-over bid in compliance with applicable securities laws. Instead, it ensures that all shareholders are treated fairly and are not subject to coercive bids.

Of critical importance to all shareholders, the Rights Plan protects against “creeping bids”, which involve the accumulation of more than 30%, on an aggregate basis, of Optiva’s subordinate voting shares (the “Shares”) through purchases exempt from applicable take-over bid rules. In the view of the Special Committee, this is fundamentally important in the current circumstances where ESW Capital, LLC (“ESW”) has disclosed an unsolicited and non-binding intention to offer to acquire any and all Shares not owned by ESW or its affiliates (the “Indicative Offer”). Based upon ESW’s public disclosures, ESW and its joint actors currently own Shares and warrants representing approximately 38.9% of the Company’s issued and outstanding Shares, assuming the exercise of the warrants owned by ESW.

If ESW or its joint actors are permitted to acquire a small number of additional Shares through purchases exempt from applicable take-over bid rules, ESW may be successful in reacquiring control of Optiva without having to make a take-over bid to all shareholders, and without payment of a control premium. The Rights Plan protects against this and ensures that any party, including ESW, that wishes to acquire control of the Company must pay an appropriate control premium to all shareholders.

Shareholders should not be misled by ESW’s recent self-interested and highly misleading claim that a vote against the Rights Plan at the Meeting will send a signal of support for the Indicative Offer. To the contrary, ratification of the Rights Plan at the Meeting will significantly enhance the likelihood that ESW actually proceeds with making a take-over bid for all the Shares not owned by ESW, by preventing ESW from acquiring control of Optiva through purchases exempt from applicable take-over bid rules.

In this regard, Optiva notes that, on Friday June 26, 2020, ESW advised Optiva in writing that it was considering a bid for the Shares at $30 per share. ESW doubled its indicative bid price to $60 per Share on Monday June 29, 2020, after Optiva announced the redemption of the Series A Preferred Shares held by ESW, as a result of which ESW lost control of Optiva’s board of directors. ESW has no incentive to pay a control premium to all holders of the Shares if it can reacquire control of the board by purchasing a small number of additional shares through exemptions from applicable take-over bid rules. The Rights Plan is intended to protect against precisely this occurrence.

To protect the interests of all shareholders, ratification of the Rights Plan at the Meeting is therefore essential, and all shareholders should vote in favour of the Rights Plan at the Meeting.

As previously identified in the Company’s July 27, 2020 press release, ESW has stated that it will only pursue its Indicative Offer if, among other things, ESW receives certain unprecedented relief from the Ontario Securities Commission (the “OSC”) exempting ESW from the requirements under applicable Canadian securities laws that prohibit an offeror from acquiring shares under a take-over bid unless a majority of shares owned other than by the offeror (and its affiliates and joint actors) are tendered to such offer. Optiva does not believe that such an exemption has ever been granted by any Canadian securities regulator. After delaying the filing of its exemption application for almost two weeks, ESW finally filed its application on the evening of August 6, 2020. It is expected by the Company that the OSC will set a schedule for a hearing in respect of ESW’s application in due course.

Optiva cautions its shareholders and potential investors that the Indicative Offer is non-binding on ESW, it is highly speculative whether the OSC will grant the unprecedented relief being sought by ESW, and even if such exemption is obtained there can be no certainty that ESW will pursue the Indicative Offer. The Special Committee has made no decision regarding the Indicative Offer.

About Optiva Inc.

Optiva Inc. is a global leader in providing CSPs with cloud-native revenue management software on the public cloud. CSP operators and mobile virtual network operators can integrate our best-of-breed charging engine into a BSS stack or deploy our fully managed, end-to-end, SaaS-based suite. Optiva solutions offer unmatched speed, scale, security and savings. Our market knowledge, analytical insights and unique Customer Success Program ensure telecoms are equipped to achieve their strategic business goals. Established in 1999, Optiva Inc. is on the Toronto Stock Exchange (TSX: OPT). For more information, visit www.optiva.com.

Caution Concerning Forward-Looking Statements

This press release contains forward-looking statements and forward looking information within the meaning of applicable securities laws. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or describes a “goal”, or variation of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. There is no assurance that any forward-looking statements will materialize. Risks that could cause our results to differ materially from our current expectations are discussed in the Company’s annual information form dated March 9, 2020 and management’s discussion and analysis in respect of the three months ended March 31, 2020. The Company disclaims any intention or obligation to update any forward-looking statements, except as required by law, even if new information becomes available, as a result of future events or for any other reason.

For additional information, please contact:

 

Optiva Media Contact: 

Kristin Donelson

media@optiva.com

 

Optiva Investor Relations Contact: 

Ali Mahdavi

investors-relations@optiva.com