VANCOUVER, Dec. 20, 2012 /CNW/ - Granville Pacific Capital Corporation
("Granville" TSXV: GE) announces that it has entered into an
arrangement agreement (the "Arrangement Agreement") with H&H Total Care
Services Inc. ("H&H") pursuant to which it is proposed that H&H will
acquire all of the issued and outstanding common shares of Granville by
way of a plan of arrangement under the Business Corporations Act (Alberta).
The cash consideration (the "Consideration") to be paid for each common
share of Granville, other than common shares held by H&H or Hendrik van
Ryk, Sr., under the Arrangement Agreement will be Cdn$0.08 per common
share. This represents over a 300% premium over the closing price of
Cdn$0.025 per share of Granville on the TSX Venture Exchange on
December 19, being the last closing price prior to this announcement.
H&H has negotiated the Arrangement Agreement on behalf of itself and
Hendrik van Ryk Sr., its sole shareholder (together, the "Purchaser").
As of today's date, the Purchaser holds 5,241,670 common shares in the
capital of Granville, representing approximately 41.56% of the total
issued and outstanding common shares.
As a result, the Purchaser is a related party to Granville, as such term
is defined in Multilateral Instrument 61-101 - Protection of Minority Securityholders in Special Transactions ("MI 61-101") and the arrangement to be completed pursuant to the
Arrangement Agreement (the "Arrangement") will be conditional upon,
among other things, the approval of the majority of the minority of
Granville's shareholders (excluding members of the Purchaser and their
affiliates). It is expected that an annual and special meeting of the
shareholders of Granville to approve annual matters and to approve the
Arrangement will be held in mid-February 2013 (the "Meeting"). The
Arrangement is also conditional upon customary terms for transactions
of this nature including there being not more than 5% of the Granville
shareholders who exercise their right of dissent in respect of the
Arrangement and the approvals of the TSX Venture Exchange and the Court
of Queen's Bench Alberta. Further particulars of the Meeting, the
Arrangement and the Arrangement Agreement will be communicated to
shareholders in due course.
If all approvals are obtained and other conditions met, it is expected
that the Arrangement will be completed by the beginning of March,
2013. Upon completion of the transactions contemplated in the
Arrangement Agreement, Granville will be delisted from the TSX Venture
The independent members of the board of directors of Granville (the
"Independent Committee") have determined that the Arrangement is fair
to Granville shareholders (other than the Purchaser), that it is in the
best interest of Granville to enter into the Arrangement Agreement, and
has agreed to recommend that Granville shareholders vote to approve the
Arrangement at the Meeting.
Evans & Evans Inc. is acting as financial advisor to the Independent
Committee with respect to the Arrangement. Evans & Evans has provided a
fairness opinion indicating that the consideration to be received by
Granville shareholders, other than the Purchaser, under the Arrangement
is fair from a financial point of view. A copy of the fairness opinion
will be included in the information circular to be provided to the
shareholders of Granville prior to the Meeting.
Paul Stevenson, one of the members of the Independent Committee, said:
"The offer of $0.08 per share represents fair value to shareholders.
Our financial advisor, Evans & Evans, Inc., used a combination of
commonly used asset and income valuation methodologies to value the
company in order to assess the offer. They concluded that the offer was
fair from a financial point of view."
Andre van Ryk, speaking on behalf of the Purchaser, said: "Granville
has not been successful as a public company for a long time. Although
it is a stable small cap company, it is not the type of story that the
resource-oriented Canadian junior market is interested in. We remain
supportive of Granville and its business model, but the costs of
remaining public, the lack of need for further financing, and the
inability to provide liquidity to its shareholders, led us to the
conclusion that it was better for Granville to continue as a private
Granville has agreed that it will not solicit or initiate discussions or
negotiations with any third party concerning any sale of any material
position or assets of Granville, or any business combination involving
Granville, and Granville has provided H&H the right to match, under
certain circumstances, any subsequent offer. An expense reimbursement
fee will be payable to H&H if the Arrangement Agreement is terminated
under certain limited circumstances.
The directors and officers of Granville who own Granville have signed
lock-up agreements agreeing to vote any shares held by them in favour
of the Arrangement at the Meeting.
Granville is involved in the business of the acquisition and operation
of senior citizens' lodging, care facilities and mental health
facilities. Granville is a publicly-traded company and trades under
the symbol "GE" on the TSX Venture Exchange. More information on the
company and its operations is available under Granville's public
profile on SEDAR at www.sedar.com.
Except for statements of historical fact, this news release contains
certain 'forward-looking information' and 'forward-looking statements'
within the meaning of applicable securities laws. Such forward-looking
statements are based on the opinions and estimates of management at the
date the statements are made, and are subject to known and unknown
risks, uncertainties and assumptions that could cause actual results to
vary materially from the anticipated results or events predicted in
these forward-looking statements, including the failure to complete the
Arrangement on a timely basis, if at all, the impact of general
economic conditions, industry conditions, governmental regulation,
volatility of commodity prices, currency fluctuations, environmental
risks, the inability to obtain required consents, permits or approvals
and competition from other industry participants. As a result, readers
are 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 of this release. Except as required by
applicable law, Granville disclaims any intention and assumes no
obligation to update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
SOURCE: Granville Pacific Capital Corp.
For further information:
Andre Van Ryk
Chief Financial Officer