EDMONTON, AB, June 28,
2022 /CNW/ - AutoCanada Inc. ("AutoCanada" or
the "Company") (TSX: ACQ) announced today its intention to commence
a substantial issuer bid (the "Offer") pursuant to which the
Company will offer to purchase up to $100,000,000 in value of its outstanding
common shares (the "Shares") from its shareholders ("Shareholders")
at a price of not less than $22 and
not more than $25 per Share.
The Offer will proceed by way of a "modified Dutch auction".
Shareholders wishing to tender to the Offer will be entitled to do
so pursuant to: (a) auction tenders in which they will specify the
number of Shares being tendered at a price of not less than
$22 and not more than $25 per Share in increments of $0.25 per Share, or (b) purchase price tenders in
which they will not specify a price per Share, but will rather
agree to have a specified number of Shares purchased at the
purchase price to be determined by auction tenders.
The cash purchase price to be paid by the Company for each
validly deposited Share will be based on the number of Shares
validly deposited pursuant to auction tenders and purchase price
tenders, and the prices specified by Shareholders making auction
tenders. The purchase price will be the lowest price which enables
the Company to purchase the maximum number of Shares not exceeding
an aggregate of $100,000,000 in
value based on valid auction tenders and purchase price tenders,
determined in accordance with the terms of the Offer. All Shares
deposited at or below the finally determined purchase price will be
purchased at such purchase price, subject to proration in
accordance with the Offer. Shares that are not taken up in
connection with the Offer, including Shares deposited pursuant to
auction tenders at prices above the purchase price, will be
returned to Shareholders.
If the aggregate purchase price for Shares validly tendered
pursuant to auction tenders and purchase price tenders at or below
the purchase price is greater than $100,000,000, the Company will purchase Shares
from the holders of Shares who made purchase price tenders or
tendered at or below the finally determined purchase price on a pro
rata basis, except that "odd lot" holders (holders of less than 100
Shares) will not be subject to proration.
As of June 27, 2022, there were 26,562,695 Shares issued
and outstanding. The Offer would be for approximately 17.1% of the
total number of issued and outstanding Shares if the purchase price
is determined to be $22 (which is the
minimum price per Share under the Offer) or approximately 15.1% of
the total number of issued and outstanding Shares if the purchase
price is determined to be $25 (which
is the maximum price per Share under the Offer).
The Offer will commence on June 30,
2022 and expire at 5:00 p.m.
(Toronto time) on August 4,
2022, or such later date and time to which the Offer may be
extended by AutoCanada (such time on such date, the "Expiration
Date"). The Offer will not be conditional upon any minimum number
of Shares being tendered. The Offer will, however, be subject to
other conditions and the Company reserves the right, subject to
applicable laws, to withdraw or amend the Offer, if certain events
occur at any time prior to payment for deposited Shares.
The closing price of the Shares on the TSX on June 27,
2022, the last full trading day prior to the Company's announcement
of its intention to make the Offer, was $24.08. Shareholders are cautioned to obtain a
current quotation for the market price of the Shares prior to
tendering to the Offer.
The Board of Directors of the Company believes that the Offer is
a prudent use of the Company's financial resources given the
Company's business profile and assets, the current market price of
the Shares and the Company's ongoing cash requirements. The Board
of Directors of the Company also believes the Offer will provide
Shareholders with the option to access liquidity with respect to
their Shares that may not otherwise be available on the TSX. The
Offer provides AutoCanada with the opportunity to return up to
$100,000,000 of capital to
Shareholders who elect to tender, while at the same time increasing
the proportionate share ownership of Shareholders who elect not to
tender. The Company intends to fund the Offer with available
cash on hand and drawings under its senior syndicated credit
facility.
Details of the Offer, including instructions for tendering
Shares to the Offer and the factors considered by the Board of
Directors in making its decision to approve the Offer, will be
included in the formal offer to purchase and issuer bid circular
and other related documents (the "Offer Documents"), which are
expected to be mailed to Shareholders, filed with applicable
Canadian Securities Administrators and made available on
June 30, 2022 on SEDAR at www.sedar.com. Shareholders should
carefully read the Offer Documents prior to making a decision with
respect to the Offer.
The Board of Directors of the Company has obtained a liquidity
opinion from Scotia Capital Inc. ("Scotia Capital") to the effect
that, based on and subject to the qualifications, assumptions and
limitations stated in such opinion, a liquid market for the Shares
exists as of June 27, 2022, and that it is reasonable to
conclude that, upon completion of the Offer in accordance with its
terms, there will be a market for the holders of Shares who do not
tender their Shares to the Offer that is not materially less liquid
than at the time of making the Offer. A copy of the opinion of
Scotia Capital will be included in the Offer Documents.
The Company has engaged Computershare Investor Services Inc.
("Computershare") to act as depositary for the Offer.
The Board of Directors of the Company has approved the Offer;
however, none of the Company, its Board of Directors, Scotia
Capital or Computershare makes any recommendation to any
Shareholder as to whether to deposit or refrain from depositing
Shares under the Offer. Shareholders are urged to evaluate
carefully all information in the Offer Documents, consult their own
financial, legal, investment and tax advisors and make their own
decisions as to whether to deposit Shares under the Offer, and, if
so, how many Shares to deposit and at what price or prices.
This press release is for informational purposes only and does
not constitute an offer to buy or the solicitation of an offer to
sell Shares. The solicitation and the offer to buy Shares will only
be made pursuant to the formal Offer Documents.
Any questions or requests for information regarding the Offer
should be directed to Computershare, as the depositary, at:
corporateactions@computershare.com, or the Company, at:
ir@autocan.ca.
About AutoCanada
AutoCanada is a leading North American multi-location automobile
dealership group currently operating 80 franchised dealerships,
comprised of 28 brands, in eight provinces in Canada, as well as a group in Illinois, USA. AutoCanada currently sells
Chrysler, Dodge, Jeep, Ram, FIAT, Alfa Romeo, Chevrolet, GMC,
Buick, Cadillac, Ford, Infiniti,
Nissan, Hyundai, Subaru, Audi, Volkswagen, Kia, Mazda,
Mercedes-Benz, BMW, MINI, Volvo, Toyota, Lincoln, Acura, Honda and Porsche branded
vehicles. Additionally, the Company's Canadian operations segment
currently operates two used vehicle dealerships supporting the Used
Digital Retail Division, the RightRide division operates seven
locations, and four stand-alone collision centres (within our group
of 18 collision centres). In 2021, our dealerships sold
approximately 86,000 vehicles and processed over 800,000 service
and collision repair orders in our 1,303 service bays generating
revenue in excess of $4 billion.
Additional information about AutoCanada Inc. is available at
www.sedar.com and the Company's website at www.autocan.ca.
Forward-Looking
Information
Certain statements contained in this press release are
forward-looking statements and information (collectively
"forward-looking statements"), within the meaning of the applicable
Canadian securities legislation. We hereby provide cautionary
statements identifying important factors that could cause our
actual results to differ materially from those projected in these
forward-looking statements. Any statements that express, or involve
discussions as to, expectations, beliefs, plans, objectives,
assumptions or future events or performance (often, but not always,
through the use of words or phrases such as "will likely result",
"are expected to", "will continue", "is anticipated", "projection",
"vision", "goals", "objective", "target", "schedules", "outlook",
"anticipate", "expect", "estimate", "could", "should", "plan",
"seek", "may", "intend", "likely", "will", "believe", "shall" and
similar expressions) are not historical facts and are
forward-looking and may involve estimates and assumptions and are
subject to risks, uncertainties and other factors, some of which
are beyond our control and difficult to predict. Forward-looking
statements included in this press release include statements
relating to the terms of the Offer, the Expiration Date, the
maximum aggregate value and purchase price of Shares to be
purchased by the Company pursuant to the Offer, the maximum
aggregate number of Shares that may be purchased pursuant to the
Offer and the expected mailing date of the Offer Documents.
Although AutoCanada believes that the expectations reflected by
the forward-looking statements presented in this press release and
the Offer are reasonable, the forward-looking statements have been
based on assumptions and factors concerning future events that may
prove to be inaccurate. Those assumptions and factors are based on
information currently available to management about the Company and
the businesses in which it operates. Information used in developing
forward-looking statements has been acquired from various sources
including third-party consultants, suppliers, regulators, and other
sources. Certain material assumptions in respect of forward-looking
statements will be disclosed in the Offer Documents to be filed by
the Company in connection with the Offer.
Because actual results or outcomes could differ materially from
those expressed in any forward-looking statements, readers should
not place undue reliance on any such forward-looking statements. By
their nature, forward-looking statements involve numerous
assumptions, inherent risks and uncertainties, both general and
specific, which contribute to the possibility that the predicted
outcomes will not occur. The risks, uncertainties and other
factors, many of which are beyond the Company's control, that could
influence actual results include, but are not limited to: the
number of Shares validly tendered and taken up in the Offer; the
ability to obtain financing for future acquisitions on favourable
terms; the impact of the COVID-19 pandemic, including any impacts
on the supply of vehicles; general economic conditions and local
operations at the Company's dealerships or offices; the impact of
the conflict in Ukraine on, among
others, vehicle production and part shortages; rapid appreciation
or depreciation of the Canadian dollar relative to the U.S. dollar;
the ability to import vehicles and parts that are manufactured
outside of Canada; a sustained
downturn in consumer demand and economic conditions in key
geographic markets; adverse conditions affecting one or more
automobile manufacturers, including but not limited to
bankruptcies/insolvency proceedings, recalls or class actions; the
ability of consumers to access automotive loans and leases;
competitive actions of other companies and generally within the
automotive industry; AutoCanada's dependence on sales of new
vehicles to achieve sustained profitability; levels of unemployment
in AutoCanada's markets and other macroeconomic factors;
AutoCanada's original equipment manufacturer's ("OEM") ability to
provide a desirable mix of popular new vehicles; the ability to
continue financing inventory under similar interest rates;
AutoCanada's OEMs ability to continue to provide manufacturer
incentive programs; the loss of key personnel and limited
management and personnel resources; the ability to refinance or
renew credit agreements in the future; changes in applicable
environmental, taxation and other laws and regulations as well as
how such laws and regulations are interpreted and enforced;
fluctuations in foreign exchange rates and tax rates; fluctuating
general economic cycles, consumer confidence, discretionary
spending, fuel prices, interest rates and credit availability;
risks inherent in the ability to generate sufficient cash flow from
operations to meet current and future obligations; the impact of
autonomous vehicles and ride-sharing services; the ability to
obtain OEM approvals for acquisitions and the uncertainty related
to the successful integration of such acquisitions.
The Company's Annual Information Form, the Offer Documents and
other documents filed with or to be filed with securities
regulatory authorities in connection with or prior to the
expiration of the Offer (accessible through the SEDAR website at
www.sedar.com) describe the risks, material assumptions and other
factors that could influence actual results. Further, any
forward-looking statement speaks only as of the date on which such
statement is made. New factors emerge from time to time, and it is
not possible for management to predict all of such factors and to
assess in advance the impact of each such factor on AutoCanada's
business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those
contained in any forward-looking statement. Additional risks and
uncertainties not presently known to AutoCanada or that AutoCanada
currently believes to be less significant may also adversely affect
the Company. AutoCanada disclaims any intention or obligation to
update or revise any forward-looking information or forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required under applicable securities
laws.
SOURCE AutoCanada Inc.