Trailmobile Canada board issues no recommendation on takeover bid

MISSISSAUGA, Ont. (March 11, 2002) — Trailmobile Canada Ltd.’s board of directors said last week it will make no recommendation to shareholders as to whether to accept a bid to take the company private.

Trailmobile Corp. of Chicago, through wholly owned 1314385 Ontario Ltd., is offering minority stockholders 10 cents per share in cash. It presently controls about 62% of the shares, and has lock-up agreements with minority shareholders that would raise its holdings to about 80%.

In a circular issued March 7, Trailmobile Canada’s board said 1314385 Ontario wants to proceed quickly with the sale due to Trailmobile Canada’s “seriously deteriorating financial condition,” and that it was “unable to receive the financial advice required to determine whether the offer is fair, from a financial point of view, to shareholders” and therefore felt uncomfortable making a recommendation.

However, the board did tell shareholders to give “serious consideration” to the 1314385 Ontario offer. It said the 20% of the shares not committed to the bid would become a “limited, illiquid public float,” and noted that “without the continued financial assistance of Trailmobile Corp., (Trailmobile Canada) may not be able to continue operating.”

Revenues for Trailmobile Canada’s 12 months ended Sept. 28, 2001, were $72.0 million, a decrease of $60.5 million or 45.7% when compared to revenues for the previous fiscal year.