Dorel Industries Inc. announced a stock buyback program. Under the plan, Dorel will be entitled to repurchase for cancellation up to 700,000 Class B Subordinate Voting Shares over a twelve-month period commencing April 1, 2010 and ending March 31, 2011, representing 2.4% of Dorel’s issued and outstanding Class B Subordinate Voting Shares.
The purchases by Dorel will be effected through the facilities of the Toronto Stock Exchange and will be made at the market price of the Class B Subordinate Voting Shares at the time of the purchase. As at March 26, 2010, there were 28,717,952 Dorel Class B Subordinate Voting Shares issued and outstanding.
During the most recently completed six months, the average daily trading volume for the Class B Subordinate Voting Shares of Dorel on the Toronto Stock Exchange was 54,334 shares. Consequently, under the policies of the Toronto Stock Exchange, Dorel will have the right to repurchase during any one trading day a maximum of 13,583 Class B Subordinate Voting Shares, representing 25% of the average daily trading volume. In addition, Dorel may make, once per calendar week, a block purchase (as such term is defined in the TSX Company Manual) of Class B Subordinate Voting Shares not directly or indirectly owned by insiders of Dorel, in accordance with the policies of the Toronto Stock Exchange.
The Board of Directors of Dorel considers that the underlying value of Dorel may not be reflected in the market price of its Class B Subordinate Voting Shares at certain times during the term of the normal course issuer bid. The Board has therefore concluded that the repurchase of shares at certain market prices may constitute an appropriate use of financial resources and be beneficial to Dorel and its shareholders.
Any purchases made pursuant to the normal course issuer bid will be made in accordance with the requirements of the Toronto Stock Exchange. Dorel will make no purchases of Class B Subordinate Voting Shares other than open market purchases during the period of the normal course issuer bid. To the knowledge of Dorel, no director or officer of Dorel intends to sell Dorel shares while the normal course issuer bid is in effect.
In addition, Dorel has entered into an automatic share purchase agreement with CIBC World Markets Inc. in connection with the normal course issuer bid. Under the agreement, CIBC may acquire, at its discretion, Class B Subordinate Voting Shares at any time on Dorel’s behalf, subject to certain parameters as to price and number of shares.
Dorel purchased a total of 477,980 Class B Subordinate Voting Shares at a weighted average price of CAD$27.17 during its most recent normal course issuer bid which ended on March 19, 2010.
The normal course issuer bid has been approved by the Toronto Stock Exchange.
