Loring Ward Buyout In Doubt

Loring Ward International Ltd. (TSX: LW) announced that its pending buyout by Werba Reinhard Inc. and Lovell Minnick Partners may not be completed, due to a decline in the company’s assets under management.


Loring Ward International Ltd. (“Loring Ward” or the “Company”) (TSX: LW) today announced that the pending transaction by which Werba Reinhard, Inc. (“WRI”) would acquire all of the outstanding shares of the Company may not be completed, due to the closing condition requiring that the Company’s assets under management and administration (“AUM/AUA”) not have declined by more than 20% from June 30, 2008 to the date of closing of the transaction. As at the close of business on October 27, 2008, AUM/AUA had declined by approximately 30%, due to the extraordinary global equity market declines of the past two months.

The AUM/AUA measurement test is a one-day test as at the time of closing. The Arrangement Agreement between the Company and WRI contemplates the transaction being completed no later than October 31, 2008, and given the current volatility in the marketplace, there can be no assurance as to whether or not this closing condition will be satisfied. Due to the probability that AUM/AUA will not increase sufficiently by October 31, 2008, the Company has proposed to WRI renegotiating the sale price, which is currently U.S. $18.00 per share, to U.S. $15.00 per share. Based on WRI’s initial response, it appears that a mutually-agreeable revised price is likely not achievable at this time. However, Loring Ward is continuing to pursue discussions with WRI at this time.

“Absent an attractive price for shareholders, now is not the time to sell a financial services business, if there is no need to sell,” stated David Rattee, Chairman of the Company’s Board of Directors and Special Committee of independent directors.

“The fundamentals of our business have not changed,” stated Robert P. Herrmann, President and Chief Executive Officer of Loring Ward. He added, “In fact, due to the conservative, diversified nature of our portfolio management approach, we expect our business to be even stronger once we get beyond this current bear market. In the meantime, excluding the non-recurring costs associated with the potential sale of the Company, we continue to experience positive operating cash flow, and remain debt free and in strong financial condition.”

Details of the transaction are contained in the management information circular of the Company dated August 20, 2008, which can be found at www.loringward.com or at www.sedar.com.