Canadian Tire Corporation Announces Friendly, All-Cash Offer to Acquire The Forzani Group Ltd.

  • Transaction will create Canada's ultimate authority in sports and Canada's largest sports retailer with more than 1,000 retail sports outlets
  • Strong financial and strategic fit to accelerate Canadian Tire's growth in a core category
  • Forzani Board of Directors unanimously supports transaction

TORONTO, May 9 /CNW/ - Canadian Tire Corporation, Limited (TSX: CTC) (TSX: CTC.A) ("Canadian Tire") today announced that it has entered into a Support Agreement with The Forzani Group Ltd. ("FGL") for Canadian Tire to acquire all of the outstanding shares of FGL for $26.50 per share in cash. The transaction will establish Canadian Tire as Canada's ultimate authority in sports, with more than 1,000 combined retail sports outlets across the country.

FGL is Canada's leading sporting goods retailer with over 500 retail outlets, annual revenue of approximately $1.4 billion and some of the country's most recognized sports brands such as Sport Chek and Sports Experts. More than 70% of FGL's sales are in athletic apparel and footwear, with the balance of sales in sporting hard goods that complement Canadian Tire's assortment with very little overlap.

Canadian Tire will also gain from having access to an expanded customer base with FGL's retail banners, including mall-based shoppers and the important 18-35 year old customer segment.

"Canadian Tire is today strengthening its credibility as Canada's ultimate authority in sports," said Stephen Wetmore, President and CEO of Canadian Tire.  "The acquisition of retail banners like Sport Chek and Sports Experts is a natural extension of our core sports business.

"Canadian Tire is on offence," continued Wetmore.  "This transaction will bring us to over 1,000 retail sports outlets across Canada, allowing us to serve nearly every need of every Canadian who plays or loves sports at every level."

"The businesses of Canadian Tire and Forzani are complementary," said Bob Sartor, CEO, Forzani Group Ltd. "The transaction has the unanimous support of the Forzani Board of Directors. It creates significant value for our shareholders and positions our business for accelerated growth under a company that shares our culture and values."

Transaction Details

The offer to FGL shareholders of $26.50 per share represents a 45% premium based on a 10-day volume weighted average price as of May 6, 2011.  The offer was made pursuant to a Support Agreement signed between Canadian Tire and FGL and received unanimous support of the FGL Board of Directors.  Terms of the Support Agreement provide for, among other things, a non-solicitation covenant on the part of FGL (subject to a "fiduciary out" provision), a right in favour of Canadian Tire to match any superior proposal and a payment of $15 million to Canadian Tire if this transaction does not proceed in certain circumstances.  Canadian Tire currently holds approximately 4% of FGL's shares.

The deal is expected to close in Q3, 2011 and is expected to be accretive to earnings in 2011.  In addition, Canadian Tire expects to realize significant cost synergies by leveraging the strengths of both organizations, including supply chain, marketing and global sourcing. Annualized savings are expected to be about $35 million, with approximately $25 million of annualized savings realized in 2012.

Canadian Tire's financial capacity to undertake this transaction is strong.  The offer is not subject to a financing condition.  It is anticipated the $771 million acquisition (excluding FGL debt and shares already owned by Canadian Tire) will be financed with $500 million of cash on hand and the balance with short-term financing.  Canadian Tire expects to return to pre-acquisition leverage levels within 18 to 24 months of closing the transaction.

Canadian Tire intends to operate the FGL retail banners as a separate business unit, similar to Mark's and Canadian Tire Financial Services.

The offer is conditional upon tendering of shares representing a minimum of 66 2/3 per cent of the outstanding FGL shares on a fully-diluted basis. The transaction is also subject to relevant regulatory approval (including the Competition Bureau), third-party consents and other customary conditions. A Circular containing the terms of the offer will be mailed by Canadian Tire to FGL shareholders, together with FGL Directors' Circular in accordance with applicable law.  These documents will also be available on the SEDAR website at, and

FGL's Board of Directors, after receiving the recommendation of a Special Committee of the Board, has unanimously determined that Canadian Tire's offer is fair to shareholders and that it is in the best interests of the company to support and facilitate the offer.  The FGL Board of Directors has received a fairness opinion from its financial advisor stating that the consideration to be received pursuant to the offer is fair from a financial point of view to the shareholders of FGL.  Accordingly, the Board of Directors of FGL is recommending to its shareholders to tender their shares to the offer. In addition, Canadian Tire has entered into lock-up agreements with each of FGL's directors and senior officers pursuant to which they have agreed to tender their shares to the offer.

Investment Community Conference Call Details

Canadian Tire will conduct a conference call to discuss information included in this news release and related matters at 8:30am EDT on Monday, May 9, 2011.  The dial-in number is 1-888-231-8191 for U.S. or Canada or 647-427-7450 for outside North America, conference ID # 64437816. The conference call will be available simultaneously and in its entirety to all interested investors and the news media through a webcast at, and will be available through replay at this website for 12 months.


BMO Capital Markets acted as financial advisor to Canadian Tire.  Legal counsel was provided to Canadian Tire by Goodmans LLP and Stikeman Elliott LLP.


This document contains forward-looking information that reflects management's current expectations related to matters related to the proposed acquisition. Forward-looking statements are provided for the purposes of providing information about management's current expectations and plans and allowing investors and others to get a better understanding of our financial position, results of operation and operating environment. Readers are cautioned that such information may not be appropriate for other circumstances.

All statements other than statements of historical facts included in this document may constitute forward-looking information, including but not limited to, statements concerning the expected benefits of the proposed acquisition, such as efficiencies, cost savings, enhanced revenue and cash flows, growth potential, market profile and financial strength; the competitive ability and position of Canadian Tire following the acquisition; the expected timing of completion of the acquisition; and management's expectations relating to possible or assumed future prospects and results, our strategic goals and priorities, our actions and the results of those actions and the economic and business outlook for us. Often but not always, forward-looking information can be identified by the use of forward-looking terminology such as "may", "will", "expect", "believe", "estimate", "plan", "could", "should", "would", "outlook", "forecast", "anticipate", "foresee", "continue" or the negative of these terms or variations of them or similar terminology. The forward-looking information contained herein is based on the reasonable assumptions, estimates, analysis and opinions of management made in light of its experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable at the date that such statements are made.

By its very nature, forward-looking information requires us to make assumptions and is subject to inherent risks and uncertainties, which give rise to the possibility that Canadian Tire's assumptions may not be correct and that Canadian Tire's expectations and plans will not be achieved. Although Canadian Tire believes that the forward-looking information in this document is based on information and assumptions that are current, reasonable and complete, this information is necessarily subject to a number of factors that could cause actual results to differ materially from management's expectations and plans as set forth in such forward-looking information for a variety of reasons. Some of the factors - many of which are beyond our control and the effects of which can be difficult to predict - include (a) the failure to obtain, on a timely basis or otherwise, required approvals of regulatory agencies (including the terms of such approvals); (b) the risk that a condition to completion of the acquisition may not be satisfied; (c) the possibility that the anticipated benefits and synergies from the proposed acquisition cannot be realized or may take longer to realize than expected; (d) the ability of Canadian Tire and FGL to retain and attract key personnel (including  franchisees) and maintain relationships with customers, suppliers and other business partners, as well as our financial arrangements with such parties; (e) the risk that credit ratings of Canadian Tire may be different than expected; (f) credit, market, currency, operational, liquidity and funding risks generally, including changes in economic conditions, interest rates or tax rates; and (g) risks and uncertainties relating to information management, technology, supply chain, product safety, changes in law, competition, seasonality, commodity price and business. We caution that the foregoing list of important factors and assumptions is not exhaustive and other factors could also adversely affect our results. Investors and other readers are urged to consider the foregoing risks, uncertainties, factors and assumptions carefully in evaluating the forward-looking information and are cautioned not to place undue reliance on such forward-looking information.

For more information on the risks, uncertainties and assumptions that could cause Canadian Tire's actual results to differ from current expectations, please refer to the "Risk Factors" section of our Annual Information Form for fiscal 2010 and our 2010 Management's Discussion and Analysis, as well as Canadian Tire's other public filings, available at and at

The forward-looking statements and information contained herein are based on certain factors and assumptions as of the date hereof. Canadian Tire does not undertake to update any forward-looking information, whether written or oral, that may be made from time to time by it or on its behalf, to reflect new information, future events or otherwise, unless required by applicable securities laws.


Canadian Tire Corporation, Limited (TSX:CTC.a) (TSX:CTC) is one of Canada's most-shopped general retailers, offering everyday products and services to Canadians through more than 1,200 retail and gasoline outlets from coast-to-coast. Our primary retail business categories - Automotive, Living, Fixing, Playing and Apparel - are supported and strengthened by our Financial Services division, which offers such products and services as credit cards, in-store financing, product warranties, and insurance. Nearly 57,000 people are employed across the Canadian Tire enterprise, which was founded in 1922 and remains one of Canada's most recognized and trusted brands.

SOURCE Canadian Tire Corporation, Limited

For further information:

Media: Liz Hamilton, 416-544-6186,
Investors: Angela McMonagle, 416-480-8225,

Profil de l'entreprise

Canadian Tire Corporation, Limited

Renseignements sur cet organisme


Renseignements sur cet organisme


Jetez un coup d’œil sur nos forfaits personnalisés ou créez le vôtre selon vos besoins de communication particuliers.

Commencez dès aujourd'hui .


Remplissez un formulaire d'adhésion à CNW ou communiquez avec nous au 1-877-269-7890.


Demandez plus d'informations sur les produits et services de CNW ou communiquez avec nous au 1‑877-269-7890.