BluMont calls special meeting to consider share acquistion proposed by IAM

Date: Tuesday, January 23, 2007
Author: Investment Executive Staff

Kangas to step down as CEO following the meeting

BluMont Capital Inc. today announced that Integrated Asset Management Corp. (IAM), BluMont’s principal shareholder, has requested that BluMont seek shareholder approval for IAM to acquire all of the BluMont common shares that it does not currently own, directly or indirectly.

BluMont is a provider of alternative investment products with approximately $790 million in assets under management.

BluMont is 60.6% owned by IAM, an alternative asset investment management company with approximately $3 billion in assets and committed capital under management.

This proposal will be considered at BluMont’s annual and special meeting of shareholders scheduled for February 28.

In connection with IAM’s proposal, Stephen Kangas has tendered his resignation as president and CEO of BluMont, to be effective immediately following the meeting, Kangas will continue to serve as president, CEO and a director of BluMont until the meeting.

In advance of the meeting, to ensure BluMont remains in compliance with applicable corporate law regarding board composition, BluMont announced that effective on January 19, Veronika Hirsch and Stephen Johnson have both resigned as directors of BluMont and Thomas Simpson has resigned as chairman of BluMont. Following these resignations, the board of directors consists of Simpson, Stephen Kangas and Victor Koloshuk. Koloshuk has been appointed chairman of BluMont.

IAM’s proposal follows its previously announced intention to acquire the remaining BluMont common shares that it did not already own. IAM currently owns, directly or indirectly, 20,509,274 BluMont common shares or approximately 60.6% of the outstanding BluMont common shares.

Pursuant to its formal exchange offer for any and all of the issued and outstanding common shares of BluMont that IAM did not already own, which expired on Nov. 10, 2006, IAM acquired an aggregate of 5,075,941 BluMont common shares on the basis of 1/3 of one IAM common share for each BluMont common share tendered.

After considering the amalgamation proposed by IAM, the voting members of the board of directors of BluMont have determined to make no recommendation to BluMont shareholders with respect to the proposed amalgamation.

BluMont’ board strongly urges shareholders to carefully review the management information circular to be used in connection with the meeting, which is expected to be mailed on or about January 26, and to consider seeking advice from their financial, tax and other professional advisors and then reach their own conclusion as to whether to vote for or against the amalgamation proposed by IAM.

Under the terms of the proposed amalgamation, BluMont shareholders would receive approximately 0.357 of an IAM common share for each BluMont common share, or one IAM common share for every 2.8 BluMont common shares held.

In order to become effective, the proposed amalgamation will require, among other things, approval by at least 66 2/3% of the votes cast by BluMont shareholders and the approval of a majority of the votes cast by “minority” holders of BluMont common shares at the meeting.

The BluMont shares owned by IAM prior to the offer will be excluded from the minority for these purposes, but the shares acquired by IAM under the offer are expected to be eligible to be counted towards the requisite minority approval.

IAM has advised BluMont that it will cause all BluMont common shares owned directly or indirectly by it to be voted in favour of the proposed amalgamation and will not exercise dissent rights with respect to such shares. In addition, IAM has advised BluMont that it has entered into support agreements with two BluMont shareholders who own, directly or indirectly, approximately 1.925 million BluMont common shares and that, under the terms of such agreements, each of the shareholders has agreed to vote or to cause to be voted all of the BluMont common shares owned by such shareholder in favour of the proposed amalgamation, subject to certain terms and conditions.

Subject to receipt of all necessary regulatory approvals, and conditional upon the completion of the amalgamation, IAM has advised BluMont that it intends to supplement the consideration paid to those persons that tendered to, and had their shares taken up by IAM under the offer, by either, at the option of IAM, (a) issuing an additional approximately 0.024 IAM common shares for each BluMont common share tendered (the Supplemental Consideration) such that those persons will in total receive one IAM common share for every 2.8 BluMont common shares already tendered, or (b) paying to such persons in cash the cash equivalent of the Supplementary Consideration.

IAM has advised that it anticipates that, if approved, the proposed amalgamation would be completed on or before March 9. Completion of the proposed amalgamation is subject to certain conditions and there can be no assurances that the amalgamation will be completed on the basis proposed, or at all.