Now let's see a counter offer from the insiders!
Janes Acquisition Corp. Announces Offer to Purchase Units of SIR Royalty Income Fund
NEWS PROVIDED BY
Janes Acquisition Corp.
Jan 27, 2021, 08:30 ET
Offer is for $4.25 per trust unit of the Fund payable in cash for up to 825,000 trust units
Offer provides a significant premium and immediate alternative to the Insider Buyout Proposal announced on January 6, 2021
Janes Acquisition Corp. and its affiliates will oppose Insider Buyout Proposal
TORONTO, Jan. 27, 2021 /CNW/ - Janes Acquisition Corp. (the "Offeror") is pleased to announce an offer (the "Offer") to purchase up to 825,000 trust units ("Units") of SIR Royalty Income Fund (TSX: SRV) (the "Fund") at a price of $4.25 per Unit (the "Purchase Price"), payable in cash.
THE PREMIUM OFFER
The Purchase Price is equal to an approximate 19.7% premium to the $3.55 per Unit price put forward by SIR Corp. ("SIR") in its buyout proposal announced on January 6, 2021 (the "Insider Buyout Proposal"), and an approximate 67.1% premium to the three-month volume-weighted average trading price of the Units on the Toronto Stock Exchange prior to the announcement of the Insider Buyout Proposal.
The Offeror is controlled by Mr. Lembit Janes, the former Chairman and CEO of Janes Family Foods. The Offeror and its affiliates and associates beneficially own or exercise control or direction over 808,100 Units, representing approximately 9.65% of the outstanding Units. Mr. Janes has been a holder of Units since September 2010.
The Offer is for up to 825,000 of the Units of the Fund. The Offer is open for acceptance until 5:00 p.m. (Toronto time) on Thursday, February 11, 2021 (the "Expiry Time"), unless the Offer is extended, varied or withdrawn.
The Offeror has posted at www.sedar.com, under the Fund's profile, a letter to holders of Units ("Unitholders") setting out more information pertaining to the Offer (the "Letter"). The Letter has also been publicly disclosed by way of a separate press release. Please also see "Details of The Offer" below.
REASONS FOR THE OFFER
The Offeror has made the Offer for investment purposes. The Offeror believes that the Insider Buyout Proposal made by SIR is not reflective of the fair value of the Fund's Units.
The Offeror believes that the Insider Buyout Proposal greatly undervalues the Fund, particularly since the trading price of the Units has been artificially reduced due to the Fund failing to make distributions after March 2020.
The Offeror acknowledges that the Fund's Independent Trustees have asked SIR for clarification of certain terms of the Insider Buyout Proposal and have asked their independent financial and legal advisors to consider various alternatives to the Insider Buyout Proposal that may be available to the Fund. The Offeror believes that the Independent Trustees should oppose the Insider Buyout Proposal, and focus on what is in the best interests of the Unitholders.
As a result of the Offer, Unitholders will receive immediate liquidity at a premium to the current trading price of the Units and at a significant premium to the Insider Buyout Proposal.
In the event that the Fund agrees to proceed with the Insider Buyout Proposal, the Offeror and its affiliates and associates will vote the Units over which they exercise control or direction, including any Units acquired under the Offer, against the Insider Buyout Proposal at any meeting of Unitholders called to approve such transaction.
DETAILS OF THE OFFER
The Offer is open for acceptance until 5:00 p.m. (Toronto time) on Thursday, February 11, 2021, provided however that the Offeror reserves the right, in its sole and absolute discretion at any time, to: (i) extend or vary the Offer at any time; or (ii) withdraw the Offer if the conditions thereto are not met, and if withdrawn, it will not be required to take up or pay for Units delivered pursuant to the Offer.
Full details of the Offer are included in the Letter. Registration of interests in and transfers of Units may currently be made through a book-entry system administered by CDS Clearing and Depository Services Inc. ("CDS"). As such, in order to deposit their Units to the Offer, Unitholders must complete the documentation and follow the instructions provided by their investment dealer, broker or other nominee. Investment dealers, brokers and other nominees may set a deadline for the delivery of deposit instructions that is earlier than the Expiry Time, and as such Unitholders should contact their investment dealer, broker or other nominee for assistance at their earliest convenience. Deposited Units may be withdrawn at any time prior to the time they are taken up by the Offeror. Participants of CDS should contact the Depositary and Information Agent with respect to the withdrawal of deposited Units.
The Offer will be subject to certain conditions set out in the Letter which, unless waived, must be satisfied. The Letter will require that each depositing Unitholder whose Units are taken up and paid for appoint representatives of the Offeror as its nominees and proxy for any upcoming Unitholders' meeting.
If more than the maximum number of Units for which the Offer is made are delivered in accordance with the Offer and not withdrawn at the time of take up of the Units, the Units to be purchased from each depositing Unitholder will be determined on a pro rata basis according to the number of Units delivered by each Unitholder, disregarding fractions, by rounding down to the nearest whole number of Units.
UNITHOLDER REQUESTS FOR ASSISTANCE
If you have any questions with respect to the Offer, or need assistance in depositing your Units, please contact the Depositary and Information Agent for the Offer: North America Toll Free Number: 1-877-452-7184; Outside North America Call Collect: 1-416-304-0211; Email: assistance@laurelhill.com.