The board of Enerflex Systems Income Fund is urging unitholders to reject a takeover offer from Toromont, saying it doesn't provide full value and contains objectionable conditions and potential rivals have expressed an interest..
Toromont Industries Ltd. has offered a choice of either $13.50 cash per unit or 0.5098 of a Toromont common share and 5 cents cash per unit, although the cash portion is capped at $300-million and the stock portion will be limited to 11.1 million shares.
Enerflex had a market value of $602-million or $13.60 per unit as of Monday's close. The stock-and-cash variation of Toromont's offer was worth $13.08 per share, about 52 cents or 4 per cent below the market price for Enerflex units.
Enerflex announced Tuesday that it and its financial advisers "have received expressions of interest from bona fide third parties and are broadly canvassing other parties, in Canada and internationally, who may be interested in a transaction with Enerflex."
"We urge unitholders to allow this process to run its full course before taking any action."
Toronto-based Toromont Industries operates two main businesses including a compression group that designs, engineers, fabricates and installs compression systems.
Calgary-based Enerflex supplies compression, production and processing and power generation equipment to the oil and gas industry.