The battle for control of Calgary-based reservation service HARS Systems Inc. tilted last week when Pegasus Solutions Inc. announced it will make an offer to HARS shareholders to purchase all outstanding common shares at a cash price of $0.62 Cdn per share.
The offer is subject to Pegasus signing additional lockup agreements with shareholders representing approximately 5.7 million of HARS’ outstanding shares by May 27.
On Thursday, Pegasus entered into a lockup agreement with one of HARS’ major shareholders, Executive Inn Inc. of Vancouver, for 6,788,377 common shares representing 32.7 per cent of HARS’ outstanding shares.
At the bid price, the deal will be valued at approximately $14 million.
The offer will be subject to Pegasus acquiring at least 75 per cent of the outstanding shares of HARS prior to the expiry of the offer and no material adverse change having occurred at HARS.
The details of the offer will be set forth in an offer to purchase and circular to be filed with securities regulators and is expected to be delivered to HARS shareholders in late May or early June.
“We are impressed with VIP’s growth and performance and believe it would be an excellent complement to our current (reservation) services businesses,” said Pegasus CEO John Davis III.
On April 26, HSI Acquisition Corp., a company owned by Vancouver investment company Trimin Capital Corp. and members of HARS’ management, filed a takeover bid circular with regulatory authorities to acquire all of the issued and outstanding common shares of HARS for $0.60 per share.
Since the start of HSI’s bid to acquire all HARS shares, HSI has acquired a total of 240,500 common shares of HARS in market transactions at an average price of $0.59 per share.
HSI now owns a total of 5,984,475 common shares of HARS, representing 26.98 per cent of the total issued and outstanding common shares of HARS on a fully diluted basis. The HARS managers continue to own a total of 136,000 common shares of HARS representing 0.61 per cent of the total shares of HARS.
HARS’ (HSS-TSX Venture) wholly owned subsidiary, VIP International Corp., provides GDS (global distribution system) and Internet distribution along with reservation services to more than 2,000 independent hotels, small hotel chains and car rental companies. During the last two years, VIP added 631 new hotel properties and five independent car rental companies to its customer portfolio.
Dallas, Tex.-based Pegasus Solutions (PEGS-Nasdaq) is a global provider of hotel reservation technologies.
Trimin (TMN-TSX) is a management company whose strategy is to acquire large equity interests in operating businesses.
