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Lakeview to be acquired in all cash transaction...

Lakeview Hotel Investment Corp. (“Lakeview” or “Company”) has announced that it has entered into an arrangement agreement dated November 9, 2021 (the "Arrangement") with 13487407 Canada Inc. ("Parent"), 13487369 Canada Inc. ("Share Purchaser") and 13487326 Canada Inc. ("Debenture Purchaser." and together with Parent and Share Purchaser, the "Purchasers"), newly formed private companies which are managed by First Canadian Management Corporation ("FCMC"), pursuant to which: (i) Share Purchaser has agreed to acquire all of the outstanding common shares of Lakeview for $0.02 per share in cash for aggregate consideration of $391,156.12; (ii) Debenture Purchaser has agreed to acquire all of the outstanding Series C Debentures and all of the Series D Debentures of Lakeview for $74.03 per $1,000 principal amount outstanding under the Series C Debentures and the Series D Debentures, for aggregate consideration of $1,356,673.78 and $752,144.80, respectively, and any and all accrued and unpaid interest owing to the Debentureholders shall be forgiven, settled and extinguished for no consideration; and (iii) Share Purchaser has agreed to pay to LHIC or to the benefit of LHIC approximately $15,000,000 for LHIC to pay and satisfy all amounts owing by LHIC to its lending syndicate led by ATB Financial, and to pay certain costs associated with the foregoing transaction (the "Transaction").

TRANSACTION HIGHLIGHTS

  • The consideration for issued and outstanding shares is $0.02. The closing price of the shares on the TSX-V on November 9, 2021, the last trading date prior to the public announcement of the Arrangement was $0.025 (TSX-V Symbol: LHR).
  • The consideration for the issued and outstanding Series C Debentures of the Company is $74.03 per $1,000 principal amount outstanding (or $7.403 per $100 principal amount outstanding). The closing price of the Series C Debentures on the TSX-V on November 9, 2021, the last trading date prior to the public announcement of the Arrangement was $1.65 (TSX-V Symbol: LHR) based on a face value of $100.
  • The consideration for the issued and outstanding Series D Debentures of the Company is $74.03 per $1,000 principal amount outstanding (or $7.403 per $100 principal amount outstanding). The closing price of the Series D Debentures on the TSX-V on November 9, 2021, the last trading date prior to the public announcement of the Arrangement was $1.15 (TSX-V Symbol: LHR.DB.D) based on a face value of $100.
  • FCMC and the Purchasers are all arms' length to Company.
  • There are currently 19,557,806 Common Shares outstanding, 18,326 Series C Debentures ($18,326,000 principal amount), and 101,600 Series D Debentures ($10,160,000 principal amount). Immediately following closing, the foregoing securities will remain outstanding with the Shares registered in the name of the Share Purchaser and the Debentures registered in the name of the Debenture Purchaser.

TRANSACTION DETAILS

  • The transaction, which will be completed by way of a plan of arrangement (the "Arrangement"), is expected to close in late December 2021, subject to the satisfaction of certain closing conditions.
  • Completion of the transaction is subject to customary closing conditions, including court approval of the Arrangement and the approval of the Arrangement by Lakeview shareholders, Series C Debentureholders and Series D Debentureholders, each voting separately as a single class (together with any majority of the minority voting approvals required under applicable Canadian securities laws).
  • The foregoing summary is qualified in its entirety by the provisions of the Arrangement Agreement, a copy of which will be filed on SEDAR. Lakeview will mail a management information circular and certain related documents to shareholders in connection with the special meeting to consider and vote on the Transaction, copies of which will also be filed on SEDAR.

LAKEVIEW BOARD OF DIRECTORS RECOMMENDATION AND FAIRNESS OPINION

The Board of Directors, after receiving the unanimous recommendation of the Special Committee, and in consultation with its legal advisors, has unanimously determined that the Transaction is in the best interests of Lakeview and fair to shareholders and debentureholders and is recommending that shareholders and debentureholders, respectively, vote in favour of the Transaction.

Tw Advisory has provided a fairness opinion to the Special Committee and Board of Directors that based upon and subject to the assumptions and limitation described in its opinion, the consideration to be received by shareholders and debentureholders, respectively, pursuant to the Transaction is fair, from a financial point of view, to the shareholders and debentureholders, respectively.

ADVISORS

Fillmore Riley LLP is acting as legal counsel to the Company. De Grandpré Chait S.E.N.C.R.L./LLP is acting as legal counsel to the Purchasers. Tw Advisory has provided the Special Committee and the Board of Directors with a fairness opinion in respect of the Transaction. Thompson Dorfman Sweatman LLP is acting as legal counsel to the Special Committee. Colliers Hotels is acting as advisor to the Company.