Fuel Systems Signs Amendment To Merger Deal With Westport Innovations

(RTTNews) - Fuel Systems Solutions Inc. (FSYS) said that it has signed an Amendment to its Agreement and Plan of Merger dated as of September 1, 2015 relating to the proposed business combination between Fuel Systems and Westport Innovations Inc. (WPRT, WPT.TO).

The Amendment has been approved by the Boards of Directors of both companies. The Amendment include Collar-based exchange ratio, Additional Board Member, Cartesian Financing Agreement.

The exchange ratio of the Merger Agreement has been amended to include a collar mechanism in order to provide Fuel Systems stockholders with greater certainty regarding the consideration they will receive upon closing of the Merger. In the event that the NASDAQ volume weighted average price of Westport common shares during a specified measuring period ("VWAP") is equal to or greater than $2.37, then Fuel Systems stockholders will receive 2.129 Westport common shares per Fuel Systems share on closing of the Merger and through the exchange process.

In the event Westport's VWAP is equal to or less than $1.64, Fuel Systems stockholders would receive approximately 3.08 Westport common shares per Fuel Systems share on closing of the merger and through the exchange process.

In the event that Westport's VWAP is greater than $1.64 and less than $2.37, then Fuel Systems stockholders would receive a number of Westport common shares per Fuel Systems share equal to dividing $5.05 by Westport's VWAP, rounded to four decimal places.

The measuring period will be the ten consecutive trading days ending on and including the trading day five business days prior to the anticipated closing date. The Merger currently is anticipated to close in late March 2016.

Under the Merger Agreement, as amended, the combined company's Board of Directors will consist of nine directors, down from ten currently at Westport. Three current directors of the Fuel Systems board will be nominated to join the combined company's Board (the "Fuel Systems Nominees"). Once the Fuel Systems Nominees have been confirmed, four of Westport's existing directors will resign.

Under the Amendment, the three Fuel Systems Nominees will nominate one additional new director. The new director will be a Canadian citizen and an "Independent Director" whose nomination for the Westport Board shall be subject to the approval of the Nominating and Corporate Governance Committee of Westport, which shall not be unreasonably withheld. Once determined, the new director nominee shall take the place of an existing Westport director, who shall resign.

Westport has also entered into an amendment to the previously announced Investment Agreement dated as of January 11, 2016 between Westport and an affiliate of Cartesian Capital Group.

On January 27, 2016, Fuel Systems received a written proposal from a third party expressing interest in acquiring all of the outstanding shares of the Company's common stock for a purchase price of $4.50 per share in cash. In connection with entering into the Amendment, Fuel Systems' Board of Directors has rejected the third party proposal and recommends that stockholders vote in favor of the amended Merger Agreement and the approval of the Merger.

The special meeting of stockholders to consider the amended Merger Agreement and the Merger is currently scheduled for March 22, 2016.