DOREL SOARS ON US$810 MILLION SPORTS UNIT SALE

Dorel Industries Inc. rose as much as 121 per cent on Tuesday after agreeing to sell its sports segment to Dutch group Pon Holdings BV for US$810 million in cash. Montreal-based Dorel expects to use the proceeds from the sale to pay down its debt. The stock closed up 102.4 per cent to $21.09 in Toronto. The boost in the share price is a vindication for investors who resisted an attempt by Cerberus Capital Management LP and members of Dorel’s founding family to take the company private earlier this year at $16 a share. The deal failed when Letko Brosseau & Associates Inc. and other large shareholders balked at the price. TD Securities analyst Derek Lessard said the sale to Pon will allow Dorel to repay all of its debt while still leaving US$310 million for other purposes.