Note 2 - Subsequent Event - Tender Offer for Span-America Medical Systems, Inc.by Savaria Corporation and Merger

6 Months Ended

Apr. 01, 2017

Notes to Financial Statements

Subsequent Events [Text Block]

2.

SUBSEQUENT EVENT

– TENDER OFFER FOR SPAN-AMERICA MEDICAL SYSTEMS, INC. BY SAVARIA CORPORATION AND MERGER

We announced on

May

1,

2017

that we have entered into an agreement and plan of merger (the “Merger Agreement”) to be acquired by Savaria Corporation, an Alberta, Canada corporation ("Savaria") (TSX:SIS).  The Merger Agreement calls for an indirect wholly-owned subsidiary of Savaria to acquire Span-America by way of an all-cash

tender

offer for

$29

per share, or approximately

$80.2

 million, followed by a merger in which such subsidiary will acquire all of the remaining shares not purchased in the

tender

offer (other than shares owned by us, Savaria or any stockholder who validly exercises any applicable dissenters’ rights).  The transaction is expected to close in the

second

calendar quarter of

2017.

  The Board of Directors of Span-America unanimously approved the Merger Agreement and the transactions contemplated thereby.  The transaction is subject to customary closing conditions, including receipt of

two

-

thirds

of Span-America's shares on a fully diluted basis in a

tender

offer to Span-America's shareholders.  All of the members of Span-America's board of directors and its senior officers have entered into

tender

support agreements with Savaria committing, subject to certain conditions and exceptions, to

tender

(without a right of withdrawal) all of their Span-America shares, constituting in aggregate approximately

15.9%

of its outstanding shares (excluding shares receivable upon the exercise of vested and exercisable options).  Following the successful completion of the

tender

offer, the Merger Agreement requires Savaria to cause to be acquired all remaining shares not

tendered

in the

tender

offer (other than shares owned by us, Savaria or any stockholder who validly exercises any applicable dissenters’ rights) through a

second

-step merger at the same price per share as that payable under the offer.