Seeking Unitholder Approval of Remaining LLC Acquisition and Adoption of Rights Plan
/NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES/
TORONTO, May 24, 2016 /CNW/ - Crius Energy Trust ("Crius" or the "Trust") (TSX: KWH.UN) announces today that it has filed a management information circular (the "Circular") and related proxy materials in advance of its annual and special meeting (the "Meeting") of the holders ("Unitholders") of units of the Trust ("Units") to be held on June 20, 2016.
The Meeting will be held for the following purposes:
- to receive and consider the audited consolidated financial statements of the Trust for the year ended December 31, 2015, together with the report of the auditors;
- to appoint the independent auditors of the Trust;
- to elect the directors of Crius Energy Administrator Inc.;
- to ratify and confirm the Deferred Trust Unit Plan (DTUP) of the Trust and approve the unallocated options, rights or other entitlements thereunder;
- to approve the issuance of up to 14,905,549 Units in partial consideration for the acquisition by the Trust and its affiliates of all of the issued and outstanding membership units of Crius Energy, LLC (the "Company") not already owned by Crius Energy Corporation, an indirect wholly‑owned subsidiary of the Trust (the "Remaining LLC Acquisition");
- to approve the adoption of the Rights Plan; and
- to transact such other business as may properly come before the Meeting or any adjournment or postponement thereof.
Approval of the Remaining LLC Acquisition
Unitholders will be asked at the Meeting to pass, with or without modification, an ordinary resolution (the "Remaining LLC Acquisition Resolution") approving the issuance of up to an additional 14,905,540 Units in connection with the Remaining LLC Acquisition.
The independent directors of Crius Energy Administrator Inc. (the "Board"), in its role as administrator for and on behalf of the Trust, has unanimously approved the Remaining LLC Acquisition and recommends that Unitholders vote in favour of the issuance of Units in connection with the Remaining LLC Acquisition. The Remaining LLC Acquisition Resolution must be passed by ordinary resolution, being more than 50% of the votes cast by those Unitholders entitled to vote, whether cast in person or by proxy. In the absence of contrary instructions, the persons named in the form of proxy intend to vote FOR the Remaining LLC Acquisition Resolution approving the Remaining LLC Acquisition.
Approval of the Adoption of the Rights Plan
The Board has unanimously adopted a unitholder rights plan for the Trust (the "Rights Plan"). The Rights Plan is effective immediately and is subject to ratification by Unitholders at the Meeting by way of an ordinary resolution (the "Unit Rights Plan Resolution") approving the Rights Plan.
The Rights Plan is designed to ensure that, to the extent possible, all of the Unitholders are treated fairly if a take-over bid is made for the Units. The Rights Plan is not intended to prevent take-over bids that treat Unitholders fairly and offer fair value. The Rights Plan permits bids that meet certain requirements intended to protect the interests of the Unitholders. The Rights Plan was not adopted in response to any specific take-over bid for the Trust that has been made or that the Trust is aware of. If the Unitholders do not ratify the Rights Plan at the Meeting, the Rights Plan and all of the rights outstanding at the time will terminate.
The Rights Plan is similar to plans adopted by other Canadian companies, and is consistent and compliant with the recently enacted amendments to Multilateral Instrument 62-104 – Take-Over Bids and Issuer Bids and changes to National Policy 62-203 – Take-Over Bids and Issuer Bids which came into effect on May 9, 2016 (the "New Take-Over Bid Rules"). In light of these regulatory changes, the Rights Plan serves to prevent a "creeping" bid, wherein an acquiror acquires more than 20% of the Units (and potentially a blocking position) under the exemptions from the New Take-Over Bid Rules.
Under the terms of the Rights Plan, one right (a "Right") will be issued and attach to each Unit outstanding and will attach to each Unit subsequently issued. The Rights issued under the Rights Plan become exercisable only if a person acquires 20% or more of the Units without complying with the "Permitted Bid" provisions of the Rights Plan or without the approval of the Board. In this event, Rights holders (other than the offeror, its affiliates, associates and joint actors) can purchase Units at a substantial discount to the prevailing market price at the time that the Rights become exercisable.
The "Permitted Bid" criteria in the Rights Plan aligns with the New Take-Over Bid Rules, which must be made to all Unitholders and must be open for acceptance for a minimum of 105 days (which period may be reduced in certain circumstances). If at the end of 105 days at least 50% of the outstanding Units (other than those owned by the offeror, its affiliates, associates and joint actors) have been tendered and not withdrawn, the offeror may take up and pay for the Units but must extend the bid for a further 10 days to allow other Unitholders to tender to the bid.
The description of the Rights Plan in this news release is qualified in its entirety by the full text of the Rights Plan, a copy of which is available on SEDAR under the Trust's issuer profile at www.sedar.com.
The Board has unanimously approved, subject to regulatory and Unitholder approval, the approval of the Rights Plan. The Unit Rights Plan Resolutions must be passed by ordinary resolution, being more than 50% of the votes cast by those Unitholders entitled to vote, whether cast in person or by proxy. In the absence of contrary instructions, the persons named in the form of proxy intend to vote FOR the Unitholder Rights Plan Resolutions authorizing the Rights Plan.
The Meeting is scheduled to be held at 9:00 a.m. (Toronto time) on June 20, 2016 at the offices of Bennett Jones LLP at Suite 3400, One First Canadian Place, Toronto, Ontario, Canada, M5X 1A4. The record date for the purpose of determining Unitholders entitled to receive notice of and to attend and vote at the Meeting was May 20, 2016.
About Crius Energy Trust
The Trust was established to provide investors with a distribution-producing investment through its ownership interest (currently 43.1%) in Crius Energy LLC. With over 900,000 residential customer equivalents, the Company is a comprehensive energy solutions partner that provides electricity, natural gas and solar products to residential and commercial customers. The Company connects with energy customers through an innovative family-of-brands strategy and multi-channel marketing approach. This unique combination creates multiple access points to a broad suite of energy products and services that make it easier for consumers to make informed decisions about their energy needs. The Company currently sells energy products in 17 states and the District of Columbia with plans to continue expanding its geographic reach.
The Trust intends to continue to qualify as a "mutual fund trust" under the Income Tax Act (Canada) (the "Tax Act"). The Trust will not be a "SIFT trust" (as defined in the Tax Act), provided that the Trust complies at all times with its investment restriction which precludes the Trust from holding any "non-portfolio property" (as defined in the Tax Act). Material information pertaining to the Crius may be found on SEDAR under the Trust's issuer profile at www.sedar.com or on the Trust's website at www.criusenergytrust.ca.
Caution Regarding Forward-Looking Statements
This news release contains forward-looking statements and forward-looking information (collectively, "Forward-Looking Statements") that involve substantial known and unknown risks and uncertainties, most of which are beyond the control of Crius, including, without limitation, those risks described in the annual information form of the Trust for the fiscal year ended December 31, 2015, dated March 15, 2016 (under the headings "Risk Factors" and "Forward-Looking Statements") and in the MD&A of the Trust for the three month period ended March 31, 2016. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words of phrases such as "will likely result", "are expected to", "expects", "will continue", "is anticipated", "anticipates", "believes", "estimated", "intends", "plans", "forecast", "projection" and "outlook") are not historical facts and may be Forward-Looking Statements which involve estimates, assumptions and uncertainties which could cause actual results or outcomes to differ materially from those expressed in such Forward-Looking Statements. Forward-Looking Statements in this news release include, but are not limited to, the anticipated effect of the Unitholder Rights Plan. These forward-looking statements are based on reasonable assumptions and estimates of management of the Trust at the time such statements were made. Actual future results may differ materially as forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Trust to materially differ from any future results, performance or achievements expressed or implied by such forward-looking statements. Crius cautions investors of the Trust's securities about important factors that could cause Crius' actual results to differ materially from those projected in any Forward-Looking Statements included in this news release. No assurance can be given that the expectations set out in this news release will prove to be correct and accordingly, prospective investors should not place undue reliance on these Forward-Looking Statements. These statements speak only as of the date of this news release and Crius does not assume any obligation to update or revise them to reflect new events or circumstances, except as required by law.
SOURCE Crius Energy Trust
For further information: Michael Fallquist, Chief Executive Officer, [email protected], (203) 663-7545; Roop Bhullar, Chief Financial Officer, [email protected], (203) 883-9900; Kelly Castledine, Investor Relations, [email protected], (416) 644-1753