TORONTO, Nov. 17, 2021 /CNW/ - Leon's Furniture Limited
(TSX: LNF.TO) ("LFL", or the "Company") announced
today its intention to commence a substantial issuer bid (the
"Offer") pursuant to which the Company will offer to
purchase up to $200,000,000 in value
of its outstanding common shares (the "Common Shares") from
holders of Common Shares (the "Shareholders") for cash. As
of November 16, 2021, there were
76,793,896 Common Shares issued and outstanding. The Offer
would be for approximately 10.7% of the total number of issued and
outstanding Common Shares if the purchase price is determined to be
$24.30 (which is the minimum price
per Common Share under the Offer) or approximately 10.4% of the
total number of issued and outstanding Common Shares if the
purchase price is determined to be $25.05 (which is the maximum price per Common
Share under the Offer).
The Offer will proceed by way of a "modified Dutch auction".
Holders of Common Shares wishing to tender to the Offer will be
entitled to do so pursuant to: (i) auction tenders in which they
will specify the number of Common Shares being tendered at a price
of not less than $24.30 and not more
than $25.05 per Common Share in
increments of $0.05 per Common Share,
or (ii) purchase price tenders in which they will not specify a
price per Common Share, but will rather agree to have a specified
number of Common Shares purchased at the purchase price to be
determined by auction tenders.
The purchase price to be paid by the Company for each validly
deposited Common Share will be based on the number of Common 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 Common Shares not
exceeding an aggregate of $200,000,000 in value based on valid auction
tenders and purchase price tenders, determined in accordance with
the terms of the Offer. Common Shares deposited at or below the
finally determined purchase price will be purchased at such
purchase price. Common Shares that are not taken up in connection
with the Offer, including Common Shares deposited pursuant to
auction tenders at prices above the purchase price, will be
returned to the Shareholders.
If the aggregate purchase price for Common Shares validly
tendered pursuant to auction tenders and purchase price tenders is
greater than the amount available for auction tenders and purchase
price tenders, the Company will purchase Common Shares from the
holders of Common 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
Common Shares) will not be subject to proration.
The Offer will commence on November
25, 2021 and expire at 5:00 p.m.
(Eastern time) on December 30, 2021 (the
"Expiration Time"), unless withdrawn or extended. The Offer
will not be conditional upon any minimum number of Common Shares
being tendered. The Offer will, however, be subject to other
conditions and the Company will reserve the right, subject to
applicable laws, to withdraw or amend the Offer, if, at any time
prior to the payment of deposited Common Shares, certain events
occur.
The Company's normal course issuer bid announced on September 15, 2021 was suspended on November 10, 2021, until after the expiration
time or the date of termination of the Offer in accordance with
applicable securities laws.
Details of the Offer, including instructions for tendering
Common 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
free of charge on or about November 25, 2021 on SEDAR at
www.sedar.com. Shareholders should carefully read the Offer
Documents prior to making a decision with respect to the Offer.
On November 16, 2021, CIBC World
Markets Inc. ("CIBC") provided an opinion to the Board of
Directors of the Company to the effect that, as of that date and
based on and subject to the qualifications, assumptions and
limitations stated in such opinion, (i) a liquid market for the
Common Shares exists as of the date of the opinion, and (ii) it is
reasonable to conclude that, on completion of the Offer, in
accordance with its terms, there will be a market for the holders
of Common Shares who do not tender their Common Shares to the Offer
that is not materially less liquid than the market that existed on
the date of the opinion. A copy of the opinion of CIBC World
Markets Inc. will be included in the Offer Documents.
The Company has further engaged CIBC to act as its dealer
manager and exclusive financial advisor and agent in connection
with the Offer. The Company has also engaged TSX Trust Company
("TSX Trust") 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, CIBC or TSX
Trust makes any recommendation to any Shareholder as to whether to
deposit or refrain from depositing Common Shares under the Offer.
Shareholders are urged to evaluate carefully all information in the
Offer, consult their own financial, legal, investment and tax
advisors and make their own decisions as to whether to deposit
Common Shares under the Offer, and, if so, how many Common Shares
to deposit and at what prices.
This press release is for informational purposes only and does
not constitute an offer to buy or the solicitation of offer to sell
Common Shares. The solicitation and the offer to buy Common Shares
will only be made pursuant to the formal offer to purchase, the
issuer bid circular and other related documents.
Any questions or requests for information regarding the Offer
should be directed to TSX Trust, as the depositary, or CIBC, as the
dealer manager.
Forward Looking Statements
This press release may
contain forward-looking information within the meaning of
applicable securities regulation. The words "may", "will", "would",
"should", "could", "expects", "plans", "intends", "trends",
"indications", "anticipates", "believes", "estimates", "predicts",
"likely" or "potential" or the negative or other variations of
these words or other comparable words or phrases, are intended to
identify forward-looking statements. These statements include,
without limitation, statements regarding the Company's intentions
and expectations with respect to the Offer, the terms and
conditions of the Offer, including the aggregate number of Common
Shares to be purchased for cancellation under the Offer and the
expected expiration date of the Offer, and purchases thereunder and
the effects of purchases under the Offer. Purchases made under the
Offer are not guaranteed and may be suspended if certain conditions
are not satisfied or waived at the discretion of the Board of
Directors. The Company believes the expectations reflected in the
forward-looking statements in this press release are reasonable but
no assurance can be given that these expectations will prove to be
correct and such forward- looking statements should not be unduly
relied upon. Forward-looking information is based on a number of
assumptions and is subject to a number of risks and uncertainties
that may cause the results or events mentioned in this press
release to differ materially from those that are discussed in or
implied by such forward-looking information. These risks and
uncertainties include, but are not limited to, general, local
economic, and business conditions. All forward-looking information
in this press release speaks as of the date hereof. The Company
does not undertake to update any such forward-looking information
whether as a result of new information, future events or otherwise.
Additional information about these assumptions and risks and
uncertainties is disclosed in filings with securities regulators
filed on SEDAR (www.sedar.com).
About Leon's Furniture Limited
LFL is the largest retailer of furniture, appliances and
electronics in Canada. Our retail
banners include: Leon's; The Brick; Brick Outlet; and The Brick
Mattress Store. Finally, with The Brick's Midnorthern Appliance
banner alongside with Leon's Appliance Canada banner, this makes
the Company the country's largest commercial retailer of appliances
to builders, developers, hotels and property management companies.
The Company has 304 retail stores from coast to coast in
Canada under various banners. The
Company operates three websites: leons.ca, thebrick.com and
furniture.ca.
SOURCE Leon's Furniture Limited