NewSat rejects EWC's takeover bid

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NewSat rejects EWC's takeover bid

Declares offer a "sham".

NewSat has taken its rejection of a hostile bid by privately held company, EWC Payments, to the Federal Government's Takeovers Panel.

In a statement to the ASX, NewSat said it was seeking orders from the Takeovers Panel to cancel EWC's offer.

The Australian-owned satellite service provider stated it was seeking a "declaration of unacceptable circumstances" on the grounds that EWC's "purported takeover offer is a sham" and its "apparent inability to perform its obligations under the proposed offer".

NewSat wanted the Panel to direct EWC to make an announcement to its "shareholders advising them the bid was cancelled" and to pay the satellite provider's costs.

Victorian-based EWC made a formal off-market bid for the satellite service provider on September 3.

At the time the company proposed a scrip-for-scrip offer, which amounted to one EWC share for every 25 NewSat shares and one EWC option for every 29 NewSat options.

NewSat's statement said the bid took its board by surprise and it had no prior knowledge of the attempted takeover. The board also recommended its shareholder's reject the offer.

In a statement to the ASX - dated September 3 - Dr Matthew Starr, managing director at EWC said this was the company's second attempt at a take-over of NewSat.

Starr said that in 2003, EWC attempted a "reverse merger with NewSat" (then known as Multimedia Limited), which failed due to the company changing its focus to a satellite-only strategy.

Starr said EWC was a wholly-owned subsidiary of a Swiss multi-national corporation, headquartered in Geneva.

He stated EWC's revenue in 2008 was about "$474,000,000 in Australia, with a gross profit of about $17 million" (the majority of "retained earnings paid to its Swiss HQ in management fees").

ASIC records show EWC Payments became a registered company on the 12th of October 2006. The company also changed its name from Edelweiss Card to EWC under a "205A Notification of Resolution Changing Company Name" on 18th of March last year.

Edelweiss Card's website states the company was a private limited company, headquartered in Geneva Switzerland.

It was founded in 2006 "to provide online merchants and members a safe and efficient online payment gateway service".

CRN's calls to the Victorian phone numbers listed on the site could not be connected.

Adam Shapiro, CFO and company secretary at NewSat told CRN it was unable to make any comments to the media.

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