Clarke Inc. announces increased investment in Holloway Lodging Corporation
Aug 14, 2014, 08:48 ET
HALIFAX, Aug. 14, 2014 /CNW/ - Clarke Inc. ("Clarke") (TSX: CKI) acquired 6,233,599 common shares of Holloway Lodging Corporation ("Holloway") at a price of $4.50 per common share, representing 31.8% of the outstanding common shares of Holloway. Immediately after the transaction, Clarke owns the following securities of Holloway: 6,874,815 common shares, $3,986,000 principal amount of the 6.25% Series B Debentures, convertible into 113,601 common shares, $6,232,000 principal amount of the 7.50% Series C Debentures, convertible into 177,612 common shares, and $7,618,000 principal amount of the 6.25% Series D Debentures, convertible into 217,113 common shares. On an as converted basis, such securities represent 36.8% of the outstanding common shares.
Michael Rapps, President and CEO of Clarke, stated: "Holloway is a great company, which we believe is significantly undervalued in the public markets. The combination of Holloway and our former portfolio company Royal Host creates a powerful platform in the Canadian hotel industry that is under-appreciated at the moment. We look forward to working with the management team at Holloway to further grow the company's asset base, cash flows and value."
Pursuant to the Securities Act (Ontario), Clarke, is presumed to be acting jointly or in concert with the Clarke Inc. Pension Plan ("Clarke Pension Plan"). On an aggregate basis, Clarke and the Clarke Pension Plan own, directly or indirectly, 8,383,141 common shares of Holloway on an as converted basis, representing approximately 41.7% of the outstanding common shares.
In purchasing the 6,233,599 common shares, Clarke relied on the private agreement exemption from the formal take-over bid rules set out in Section 100.1(1) of the Securities Act (Ontario). Clarke was entitled to rely on this exemption because (i) the purchase of the 6,233,599 common shares was not made from more than five persons, (ii) the offer to purchase was not made generally to all holders of Holloway's common shares, and (iii) the value of the consideration paid for the 6,233,599 common shares, including brokerage fees or commissions, was not greater than 115% of the market price of Holloway's common shares on the Toronto Stock Exchange on August 13, 2014 as determined in accordance with Section 1.3 of Ontario Securities Commission Rule 62-504 - Takeover Bids and Issuer Bids.
Clarke may, from time to time, acquire additional shares and debentures of Holloway, dispose of some or all of the existing or additional shares and debentures of Holloway, or continue to hold the shares and debentures of Holloway in the normal course of Clarke's investment activities.
Halifax-based Clarke Inc. invests in undervalued businesses and participates actively where necessary to enhance performance and increase return. Clarke trades on the Toronto Stock Exchange (CKI); for more information about Clarke Inc., please visit our website at www.clarkeinc.com.
This press release may contain or refer to certain forward-looking statements relating, but not limited to, Clarke's expectations, intentions, plans and beliefs with respect to Clarke. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "does not expect", "is expected", "budget", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or equivalents or variations, including negative variations, of such words and phrases, or state that certain actions, events or results, "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved. These forward-looking statements include, but are not limited to, statements regarding the trading price of the Company's securities not fully reflecting the value of the Company's business.
Forward-looking statements rely on certain underlying assumptions that, if not realized, can result in such forward-looking statements not being achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of Clarke to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. Risks and uncertainties include, among others, the Company's investment strategy, legal and regulatory risks, general market risk, potential lack of diversification in the Company's investments, and interest rates and foreign currency fluctuations. Although Clarke has attempted to identify important factors that could cause actual actions, events or results or cause actions, events or results not to be estimated or intended, there can be no assurance that forward-looking statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Other than as required by applicable Canadian securities laws, Clarke does not update or revise any such forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events. Accordingly, readers should not place undue reliance on forward-looking statements.
SOURCE: Clarke Inc.
For further information:
Vice President Investments
6009 Quinpool Road, 9th Floor
Halifax, Nova Scotia B3K 5J7
Telephone: (902) 442-3000
Fax: (902) 442-0187
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