RICHMOND, BC, May 25, 2015 /CNW/ - Great Canadian Gaming Corporation [TSX:GC] ("Great Canadian" or the "Company") announces today that it has entered into an agreement with a company controlled by the Estate of Ross J. McLeod (the "Estate") to purchase 3,400,000 common shares of the Company (the "Estate Shares"). The purchase price is $77.7 million or $22.8545 per share. The Estate Shares represent approximately 4.88% of the current number of outstanding common shares. Ross J. McLeod was a director and officer of the Company who passed away in 2011.
The completion of the purchase of the Estate Shares is subject to the receipt of all required gaming regulatory approvals and the receipt of an order from the Canadian securities regulators exempting the purchase from the issuer bid requirements of Multilateral Instrument 62-104 Take-Over Bids and Issuer Bids ("MI 62-104"). There can be no assurance that the approvals and order will be obtained by the closing deadline of June 24, 2015 (or any permitted extension).
MI 62-104 contains an exemption, section 4.7, from the issuer bid requirements to permit the purchase of shares from a former employee, executive officer or director of the issuer. The purchase price for the Estate Shares is at a discount to the market price of the shares calculated in compliance with the requirements of section 4.7 (a 20 day average) and the number of Estate Shares is below the maximum number of shares that may be purchased under that section. But for the fact that the Estate Shares are now controlled by the estate of the deceased officer and director, the purchase would comply with the provisions of section 4.7 of MI 62-104.
Once purchased, the Estate Shares will be cancelled. Shareholders should review their holdings and determine whether, after cancellation of the Estate Shares, the number of shares they hold would trigger a requirement to register with a gaming authority. The registration requirements are set out in the Company's articles, a copy of which is available under the Company's profile at www.SEDAR.com.
"The shares we are purchasing represent approximately one-half of the remaining shares held by the Estate. We are only able to purchase these shares on an exempt basis and the number being acquired is generally the maximum number that we are permitted to purchase under the exemption in section 4.7 of MI 62-104" said Rod N. Baker the President and CEO of the Company. "We think this is an excellent opportunity to increase the economic interest of our shareholders in the Company and a good use of our cash to increase shareholder value. We have sufficient cash reserves and credit facilities to purchase the Estate Shares and move forward with our planned expenditures including the purchase of Casino New Brunswick."
ABOUT GREAT CANADIAN GAMING CORPORATION
Great Canadian Gaming Corporation operates gaming, entertainment and hospitality facilities in British Columbia, Ontario, Nova Scotia, and Washington State. The Company's 16 gaming properties consist of three community gaming centres, four racetracks (two with casinos operated by the Company and two with casinos operated by the Ontario Lottery and Gaming Corporation), and nine casinos, including one with a Four Diamond resort hotel. As of March 31, 2015, the Company had approximately 3,900 employees in Canada and 500 in Washington State. Further information is available on the Company's website, www.gcgaming.com.
This press release contains certain "forward-looking information" or statements within the meaning of applicable securities legislation. Forward-looking information is based on the Company's current expectations, estimates, projections and assumptions that were made by the Company in light of its historical trends and other factors. All information or statements, other than statements of historical fact, are forward-looking information including statements that address expectations, estimates or projections about the future and the timing and terms of the purchase of shares from the Estate of Ross J. McLeod. Forward-looking information may be identified by words such as "anticipate", "believe", "expect", or similar expressions. Such forward-looking information is not a guarantee of future performance and may involve a number of risks and uncertainties.
Although forward-looking information is based on information and assumptions that the Company believes are current, reasonable and complete, they are subject to unknown risks, uncertainties, and a number of factors that could cause actual results to vary materially from those expressed or implied by such forward-looking information. Such factors may include, but are not limited to: the obtaining of all required approvals to purchase the Estate Shares and the benefit of that may accrue to shareholders of the Company; terms of operational service agreements with lottery corporations; changes to gaming laws that may impact our operational service agreements; pending, proposed or unanticipated regulatory or policy changes; the outcome of restructuring of gaming in Ontario; the Company's ability to obtain and renew required business licenses, leases, and operational services agreements; the future of horse racing in Ontario; unanticipated fines, sanctions and suspensions imposed on the Company by its regulators; impact of global liquidity and credit availability; possible reassessments of the Company's prior tax filings by tax authorities; adverse tourism trends and further decreases in levels of travel, leisure and consumer spending; competition from established competitors and new entrants in the gaming business; dependence on key personnel; the Company's ability to manage its capital projects and its expanding operations; the risk that systems, procedures and controls may not be adequate to meet regulatory requirements or to support current and expanding operations; potential undisclosed liabilities and capital expenditures associated with acquisitions; negative connotations linked to the gaming industry; First Nations rights with respect to some land on which we conduct our operations; future or current legal proceedings; construction disruptions; financial covenants associated with credit facilities and long-term debt; credit, liquidity and market risks associated with our financial instruments; interest and exchange rate fluctuations; non-realization of cost reductions and synergies; demand for new products and services; fluctuations in operating results; economic uncertainty and financial market volatility; technology dependence; and privacy breaches or data theft. The Company cautions that this list of factors is not exhaustive. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. These factors and other risks and uncertainties are discussed in the Company's continuous disclosure documents filed with the Canadian securities regulatory authorities from time to time, including in the "Risk Factors" section of the Company's Annual Information Form for fiscal year 2014, and as identified in the Company's disclosure record on SEDAR at www.sedar.com.
Readers are cautioned not to place undue reliance on the forward-looking information, as there can be no assurance that the plans, intentions, or expectations upon which they are based will occur. The forward-looking information contained herein is made as of the date hereof and is subject to change after such date, and is expressly qualified in its entirety by cautionary statements in this press release. Forward-looking information is provided for the purpose of providing information about management's current expectations and plans and allowing investors and others to get a better understanding of the Company's operating and financial environment. The Company undertakes no obligation to publicly revise forward-looking information to reflect subsequent events or circumstances except as required by law.
ON BEHALF OF
GREAT CANADIAN GAMING CORPORATION
"Original Signed by Rod N. Baker"
Rod N. Baker
President and Chief Executive Officer
SOURCE Great Canadian Gaming Corporation
For further information: For enquiries: [email protected] or Ms. Tanya Ruskowski, Executive Assistant to the President and Chief Executive Officer and the Chief Financial Officer, (604) 303-1000