Directors’ Circular
Letter to Shareholders
Reasons for Rejecting the Offer
FAQs
Contact Information
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Frequently Asked Questions

  1. Should I accept or reject the Maxam Offer?
    The C.A. Bancorp Board unanimously recommends that Shareholders REJECT the Maxam Offer and NOT TENDER their Common Shares. Each of the Directors and officers of C.A. Bancorp is NOT tendering his or her Common Shares to the Maxam Offer, which the C.A. Bancorp Board views as offering inadequate consideration to Shareholders.

  2. How do I reject the Maxam Offer?
    You do not need to do anything. DO NOT tender your Common Shares.

  3. Can I withdraw my Common Shares if I have already tendered?
    YES. Under the Maxam Offer, you can withdraw your Common Shares:
    1. at any time before your Common Shares have been taken up and paid for by Maxam;
    2. at any time before the expiration of 10 days from the date upon which either:
      1. change relating to a change which has occurred in the information contained in the Maxam Offer or the Maxam Circular, each as may be varied or amended from time to time, which change would reasonably be expected to affect the decision of a Shareholder to accept or reject the Maxam Offer (other than a change that is not within the control of Maxam or an affiliate of Maxam) in the event that such change occurs prior to the expiry of the Maxam Offer or after such time but before the expiry of all rights to withdraw the Common Shares under the Maxam Offer; or
      2. a notice of variation concerning a variation in the terms of the Maxam Offer (other than a variation consisting solely of an increase in the consideration offered for the Common Shares and an extension of the time for deposit to not later than 10 days after the date of notice of variation or a variation in the terms of the Maxam Offer consisting solely of a waiver of one or more of the conditions of the Maxam Offer;
      is distributed, but only if such deposited Common Shares have not been taken up by Maxam before the date of the notice of change or notice of variation, as the case may be, and subject to abridgement of that period pursuant to such order or orders as may be granted by the courts or applicable securities regulatory authorities; or
    3. if your Common Shares have not been paid for by Maxam within three business days after having been taken up.

  4. How do I withdraw my Common Shares?
    We recommend you contact your broker or Kingsdale Shareholder Services, the Information Agent retained by C.A. Bancorp, at the number listed at the end of this Q&A for information on how to withdraw your Common Shares.

  5. Why does the C.A. Bancorp Board believe that the Maxam Offer should be rejected?
    The C.A. Bancorp Board unanimously believes that the Maxam Offer fails to provide full value for C.A. Bancorp and is an attempt by Maxam to acquire C.A. Bancorp without offering adequate consideration to Shareholders. The C.A. Bancorp Board identified a number of factors set out below as being the most relevant to its recommendation to Shareholders to REJECT the Maxam Offer:
    • The Maxam Offer is inadequate, as it significantly undervalues C.A. Bancorp’s assets and business.
      • Maxam’s offer price represents a 49.9% discount to net asset value as of September 30, 2009.
      • C.A. Bancorp’s cash, public investments (including Charter REIT and C.A. Bancorp Canadian Realty Finance Corporation) and marketable securities alone have an aggregate value of $1.03 per Common Share.
      • Maxam’s offer materially undervalues C.A. Bancorp’s private investment portfolio, which has achieved an implied IRR of approximately 20% from inception to September 30, 2009.
      • Additionally, Maxam’s offer does not reflect the value of C.A. Bancorp’s other assets, such as its management agreements, regulatory licences and tax loss carryforwards.
    • CIBC, C.A. Bancorp’s independent financial advisor, has delivered a written opinion dated December 21, 2009 (the “Opinion”) stating that, as of such date and based upon and subject to the assumptions, limitations and qualifications set forth therein, the consideration offered by Maxam to Shareholders pursuant to the Maxam Offer is inadequate, from a financial point of view, to Shareholders.
    • The timing of the Maxam Offer is opportunistic and is prejudicial to C.A. Bancorp and its Shareholders.
      • Maxam’s offer attempts to take advantage of C.A. Bancorp’s temporarily depressed share price.
      • C.A. Bancorp recently completed the internalization of its administration and management functions, which is only starting to benefit C.A. Bancorp and its Shareholders.
      • C.A. Bancorp enjoys a very solid financial position, with virtually no long-term debt or capital lease obligations and minimal other long-term obligations.
      • Maxam’s offer has been made during the winter holiday season and is only open for acceptance for the legal minimum of 35 days, denying Shareholders the opportunity to make a reasoned and informed decision.
    • The Board of Directors has initiated a process under which superior proposals, delivering greater value for Shareholders, may emerge.
    • Maxam’s offer is extremely conditional, to the point where it is not a firm offer.
    • Maxam’s offer is at a discount to current trading prices. Maxam itself has made purchases since the announcement of its offer at a premium to the offer price.
    Each of the Directors and officers of C.A. Bancorp (who, together with their associates and affiliates, hold or exercise control or direction over an aggregate of approximately 14.2 % of the Common Shares) has indicated to C.A. Bancorp his or her intention not to accept the Maxam Offer.

  6. What is C.A. Bancorp doing in response to the Maxam Offer?
    The C.A. Bancorp Board has established a Special Committee, which is pursuing and evaluating strategic opportunities to maximize value. C.A. Bancorp has been solicited by, and has initiated contact with, a number of third parties who have expressed an interest in pursuing alternative transactions.

  7. Isn’t this a “friendly” transaction?
    NO. In a friendly transaction, the two companies work together to come to an agreement that would enhance shareholder value. The Maxam Offer, however, was initiated on an unsolicited basis without Maxam first approaching the Company to discuss transaction structure, consideration or alternatives. This bid employs the minimum time frames permitted under Canadian securities legislation and reduces the Company’s ability to consider strategic alternatives that may enhance shareholder value. Accordingly, the Maxam Offer should be considered a “hostile” take-over bid.

  8. Do I have to decide now?
    NO. You do not have to take any action at this time. The Maxam Offer is scheduled to expire at 4:00 p.m. (Vancouver time) on January 12, 2010, and is subject to a significant number of conditions. The C.A. Bancorp Board recommends that you not take any action until closer to the expiry date of the Maxam Offer to ensure that you are able to consider all of the options available to you. In addition, the C.A. Bancorp Board has adopted a shareholder rights plan (defined herein as the “Rights Plan”). The purpose of the Rights Plan is not to deter control transactions; its primary purposes are to ensure that the Company and its Shareholders have sufficient time to consider and properly respond to an unsolicited take-over bid (such as the Maxam Offer) and to provide additional protection for the interests of the Company and its Shareholders in the context of a proposed control transaction. The Maxam Offer is not a “permitted bid” under the terms of the Rights Plan, which may result in an extension or withdrawal of the Maxam Offer.

    If you have already tendered your Common Shares to the Maxam Offer and you decide to withdraw these Common Shares from the Maxam Offer, you must allow sufficient time to complete the withdrawal process prior to the expiry of the Maxam Offer. For more information on how to withdraw your Common Shares, you should contact your broker or Kingsdale Shareholder Services, the Information Agent retained by C.A. Bancorp, at the number listed below.

  9. Who do I ask if I have more questions?
    The C.A. Bancorp Board recommends that you read the information contained in this Directors’ Circular. You should contact Kingsdale Shareholder Services, the Information Agent retained by C.A. Bancorp, with any questions or requests for assistance that you might have.

    KINGSDALE SHAREHOLDER SERVICES:
    North American Toll-Free Number: 1-888-518-1556
    Banks and Brokers call collect: 416-867-2272
    Email: contactus@kingsdaleshareholder.com