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TORONTO, June 24, 2020 /CNW/ – 2583262 Ontario Inc. (“258” or the “Company“) is pleased to announce a plan of arrangement under section 182 of the Business Corporations Act (Ontario) (the “Arrangement“), pursuant to which the Company plans to spin out eight wholly-owned subsidiaries of the Company (collectively, the “Subsidiaries“) by way of distributing the securities of the Subsidiaries held by 258 to the shareholders of 258 (“258 Shareholders“).
The Arrangement
Under the terms of the Arrangement Agreement, each 258 Shareholder shall receive: (i) 100,000 common shares of 1246764 B.C. Ltd. (“764”), 100,000 common shares of 1246765 B.C. Ltd. (“765”), 100,000 common shares of 1246768 B.C. Ltd. (“768”), 100,000 common shares of 1246773 B.C. Ltd. (“773”), 100,000 common shares of 1246775 B.C. Ltd. (“775”), 100,000 common shares of 1246777 B.C. Ltd. (“777”), 100,000 common shares of 1246778 B.C. Ltd. (“778”) and 100,000 common shares of 1246779 B.C. Ltd. (“779”) for each outstanding common share of 258 held (the “Distributed Securities“).
In addition to the distribution of the Distributed Securities to the 258 Shareholders, each currently outstanding common share of 258 (“Common Share“) shall be exchanged for one new common share of 258 (“New Common Share“).
Following completion of the Arrangement, each of the Subsidiaries will be a separate unlisted reporting issuer in the Province of British Columbia. 258 has no material assets, and does not carry on any business as of the date hereof, and following the completion of the Arrangement, neither 258 nor any of the Subsidiaries will have any material assets or carry on any active business, other than the identification and evaluation of potential acquisitions of value accreting assets or businesses.
The Arrangement is anticipated to close in July 2020. Closing of the Arrangement is subject to the approval of not less than 662/3% of the votes cast by holders of Common Shares at the 258 Meeting (as defined below). The Arrangement is also subject to, among other conditions, the approval of the Superior Court of Ontario, the receipt of all necessary regulatory approvals and satisfaction of certain other closing conditions that are customary for a transaction of this nature.
It is anticipated that a special meeting of the holders of Common Shares will be held at 10:00 (EDT) on July 2, 2020 (the “258 Meeting“) at Bay Adelaide Centre, East Tower, 22 Adelaide Street West, Suite 3400, Toronto, Ontario, M5H 4E3 for the purpose of considering, and if thought fit, approving the Arrangement. Details of the Arrangement will be set forth in the Company’s management information circular, a copy of which will be delivered to the 258 Shareholders in advance of the 258 Meeting and a copy will be made available on the Company’s profile at www.sedar.com.
258 Board Approval and Recommendation
The Board has unanimously approved the Arrangement Agreement, determined that the Arrangement is in the best interests of 258 and the shareholders of 258, and the Board has unanimously resolved to recommend that the shareholders of 258 vote in favour of the Arrangement, at the 258 Meeting.
Strategic Rationale
The key benefits to holders of Common Shares with respect to the Arrangement are as follows:
- the Arrangement is anticipated to result in separate and well-focused entities, each of which will provide a platform for transactions that the directors wish to target, which will provide a transaction advantage to competitors in Canada and abroad;
- each of the entities resulting from the Arrangement will be better able to pursue its own specific business strategies without being subject to financial or other constraints of the businesses of the other entities, providing new and existing shareholders with optionality as to investment strategy and risk profile;
- each entity resulting from the Arrangement will be better able to focus on a specific industry and geographic location, allowing such entities to be more readily understood by investors and better positioned to raise capital;
- the Arrangement will result in separate non-listed public entities, which is anticipated to benefit the 258 Shareholders as a result of each of the entities:
- (i) being better able to align management and employee incentives with the interests of shareholders;
- (ii) having the ability to effect acquisitions by way of public share issuances; an
- (iii) being able to apply to become “short form eligible” by filing, among other things, an Annual Information Form, allowing such entity to raise capital under the short form prospectus regime governed by Canadian securities legislation, which is anticipated to create financing advantages; and
- following the Arrangement, each resulting entity will be a reporting issuer under Canadian securities legislation and accordingly, the 258 Shareholders will continue to benefit from public company oversight from the securities commissions and the higher continuous disclosure, governance and financial statement requirements applicable to public companies.
Complete details of the terms of the Arrangement are set out in the Arrangement Agreement, which will be filed by 258 and will be available for viewing under 258’s profile at www.sedar.com.
ADVISORY ON FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements and information (“forward-looking statements“) within the meaning of applicable securities laws and is based on the expectations, estimates and projections of management of 258 as of the date of this news release, unless otherwise stated. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “objective”, “ongoing”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends” and similar expressions are intended to identify forward-looking statements. More particularly and without limitation, this news release contains forward-looking statements concerning: anticipated benefits of the Arrangement to the 258 Shareholders, the timing and anticipated receipt of required regulatory, court and securityholder approvals for the Arrangement; the ability of 258 to satisfy the other conditions to, and to complete, the Arrangement; and the anticipated timing of the management information circular regarding the Arrangement and the holding of the 258 Meeting. Such forward-looking statements are provided for the purpose of providing information about management’s current expectations and plans relating to the future. Investors are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions.
In respect of the forward-looking statements concerning the anticipated benefits and completion of the proposed Arrangement and the anticipated timing for completion of the Arrangement, 258 has provided such in reliance on certain assumptions that it believes are reasonable at this time, including assumptions as to the time required to prepare and mail securityholder meeting materials, including the required information circular; the ability of 258 to receive, in a timely manner, the necessary regulatory, court, securityholder, stock exchange and other third party approvals, and the ability of each of the parties to the Arrangement Agreement to satisfy, in a timely manner, the other conditions to the closing of the Arrangement.
The anticipated dates provided may change for a number of reasons, including unforeseen delays in preparing meeting materials, inability to secure necessary securityholder, regulatory, court or other third party approvals in the time assumed or the need for additional time to satisfy the other conditions to the completion of the Arrangement. Accordingly, readers should not place undue reliance on the forward-looking statements contained in this news release.
Since forward-looking statements addresses future events and conditions, such information by its very nature involves inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to risks such as failure to obtain required approvals; increased costs and expenses; interest rate and exchange rate fluctuations; competition; failure to realize the anticipated benefits of the Arrangement; and changes in legislation, including but not limited to tax laws. Risks and uncertainties inherent in the nature of the Arrangement include the failure to obtain necessary securityholder, regulatory, court and other third party approvals, or to otherwise satisfy the conditions to the Arrangement, in a timely manner, or at all. Failure to so obtain such approvals, or the failure to otherwise satisfy the conditions to the Arrangement, may result in the Arrangement not being completed on the proposed terms, or at all.
Readers are cautioned that the foregoing list of factors is not exhaustive. The reader is cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements contained in this news release are made as of the date hereof and 258 undertakes no obligations to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
SOURCE 2583262 Ontario Inc.
For further information: please contact: James Ward CEO, 2583262 Ontario Inc., Phone: 416-897-2359, [email protected]
