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Privatization of Xentel with Schroder Ventures US
Receives Securityholder and Court Approvals
CALGARY, ALBERTA, May 2, 2003 - Xentel DM Incorporated (TSX Venture Exchange: XDM), a North American specialty entertainment and relationship marketing company, announced today that Xentel's securityholders approved the privatization of Xentel at a securityholders' meeting held in Toronto this morning by a vote of 99.99% in favour of the transaction, including the affirmative vote of 99.98% of the majority of the minority. Xentel also announces that the Court of Queen's Bench of Alberta has granted an order approving the Plan of Arrangement pursuant to which the company is being privatized with Schroder Ventures US ("SVUS").
On March 6, 2003, Xentel announced that it had entered into a Merger Agreement with SVUS. Pursuant to the Merger Agreement, all Xentel shareholders will receive Cdn. $2.00 for each share of Xentel held (and in-the-money amounts for outstanding options and warrants). The two principal shareholders of Xentel will also receive Cdn $2.00 per share for approximately 28% of their aggregate shareholdings and will receive exchangeable shares and preferred shares of a new holding company (valued at Cdn. $2.00 per share) for the balance of their aggregate shareholdings. Upon completion of the transactions contemplated by the Merger Agreement and the Plan of Arrangement, the principal shareholders will hold approximately 31%, and SVUS will hold approximately 69%, of the equity of the holding company, and the holding company will own 100% of the equity of Xentel.
"The partnership with Schroder Ventures US provides Xentel with access to greater strategic and financial support in our pursuit of growth within the North American market," stated Michael Platz, Chairman and Co-Chief Executive Officer of Xentel. "With the combination of Xentel's 24 years' experience in entertainment production and marketing and Schroder Ventures US's proven strength as a financial partner, Xentel is even better able to meet the needs of our present and future clients."
Xentel anticipates that the Plan of Arrangement will be completed near the end of May, 2003. The TSX Venture Exchange halted trading of the Xentel common shares at the open of trading this morning, and has advised Xentel that trading shall resume on May 5, 2003.
About Xentel
Xentel is one of North America's leading relationship-marketing concerns and producers of cause-related entertainment events. Its success is attributable to proprietary sales tools including technologically advanced teleservices and sophisticated customer databases. Xentel has over 300 clients and 2,000 employees in 22 offices across North America, and is traded on the TSX Venture Exchange under the symbol XDM.
The TSX Venture Exchange has neither approved nor disapproved the contents of this announcement.
For more information, please contact:
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Caren Holtby
Investor Relations
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Tel: (866) 204-9861
Fax: (416) 633-4643
carenh@xentel.com
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