Shermag Weighs Privatization Offer By Largest Shareholder, Clark Inc.

Furniture World News

Canadian Business Online (www.canadianbusiness.com) reported that, "Embattled Quebec-based furniture maker Shermag Inc. (TSX:SMG) is weighing a going-private proposal from its largest shareholder, Halifax-based Clarke Inc. (TSX:CKI), which has a reputation for buying and restructuring troubled companies." Clark, owned primarily by institutional investors already owns about 20 percent of Shermag. The independent members of the Board of Directors of Shermag Inc. announced in a press release that they, "received a letter from Clarke Inc. expressing an interest in privatizing the Company at a price to be negotiated by Clarke and the independent members of the Shermag Board. Clarke has indicated that the price it is willing to pay is below Shermag's current trading price, and that it intends to approach other major shareholders to invite them to participate in the privatization." The Board of Directors said that they have formed an Independent Committee to review the Clarke proposal and any other offer that may be submitted by any other party, and to negotiate the terms of any such offer in the best interests of Shermag and its shareholders. Profile: Shermag Inc. (SMG), headquartered in Sherbrooke, Québec, is a leader in the design, production, marketing and distribution of high-quality residential furniture. The Company is a vertically integrated manufacturer and importer with its own cutting rights, sawmill, manufacturing operations and global sourcing division. It currently employs approximately 1,050 people; following the February 2008 plant closures, Shermag will have 730 employees.