Transaction Highlights
- Anticipated consideration of $1.15 per Rifco Share represents a significant premium of approximately 28% to the closing price of Rifco Shares on August 9, 2021
- 100% cash consideration would provide immediate liquidity and certainty of value for Rifco shareholders
- Anticipated support from 64% of holders of Rifco Shares in favour of the Transaction
- Jeffrey Newhouse steps down as CEO of Rifco
Red Deer, Alberta--(Newsfile Corp. - August 10, 2021) - Rifco Inc. (TSXV: RFC) ("Rifco" or the "Company"), announced today that is has received a non-binding proposal from Warren Van Orman, Doug Decksheimer and Roger Saran, each an officer of the Company (collectively, the "Purchaser") pursuant to which the Purchaser would, if supported by the Board of Directors of Rifco (the "Board"), acquire all of the issued and outstanding common shares of Rifco (the "Rifco Shares") (the "Transaction").
Special Committee and Board of Directors Responsibilities
A special committee of Rifco's Board (the "Special Committee") has been constituted to review the Purchasers' proposal for Rifco and to negotiate a binding agreement, further to which Raymond James Ltd. ("Raymond James") has been retained as financial advisor. Should the Special Committee recommend the Transaction, it will be referred to the Board for approval. If approved by the Board, an Arrangement Agreement pursuant to a Plan of Arrangement would be presented for approval at a Special Meeting of the Rifco shareholders, which is expected to held in late September or early October, 2021.
Transaction Details
The Purchaser intends to offer $1.15 per Rifco Share. This would represent a significant premium of approximately 28% to the closing price of Rifco Shares on the Toronto Venture Exchange on August 9, 2021. The proposal compares favourably with the previous offer, approved by Rifco securityholders on April 3, 2020 for $1.18 per share, after considering the $0.35 special dividend that was paid to shareholders on December 10, 2020.
The Purchaser has indicated that informal support has been received from approximately 64% of current holders of Rifco Shares. The Purchaser believes a going-private transaction is the best solution to Rifco's current closely-held, deeply-divided shareholder base and highly illiquid stock.
Advisors and Counsel
Raymond James is acting as exclusive financial advisor to Rifco's Special Committee in connection with the Transaction. Miller Thompson LLP is acting as counsel to Rifco.
Warren Sinclair LLP is acting as counsel to the Purchaser.
Resignation of CEO
In addition to the foregoing, Jeffrey Newhouse has decided to step down as CEO of Rifco to focus his full-time efforts on autologiQ Inc. The Board supports Mr. Newhouse's decision and looks forward to Mr. Newhouse's continued involvement as a director of Rifco.
About Rifco Inc.
Rifco Inc. is focused on being Canada's best alternative auto finance company through its wholly owned subsidiary Rifco National Auto Finance Corporation. Our mission is to help deserving Canadians own automobiles.
Rifco seeks to create sustainable long-term competitive advantages through personalized partnerships with dealers, innovative products, the use of industry-leading data and analytics, and leading collections practices. Rifco's corporate culture fosters employees that are highly engaged, innovative, and performance driven.