PointNorth Files Application with Alberta Securities Commission to Halt Liquor Stores' Vote-Buying Scheme

  • Liquor Stores' Board approved the payment to advisors to solicit votes in favour of only management nominees
  • The vote-buying scheme is against the public interest and PointNorth has applied to the Alberta Securities Commission to stop payments being made pursuant to the scheme

CALGARY, June 13, 2017 /CNW/ - PointNorth Capital Inc., together with certain of its affiliates and associates (collectively, "PointNorth"), the largest shareholder of Liquor Stores N.A. Ltd. ("Liquor Stores" or the "Company"), announced today that it has filed an application with the Alberta Securities Commission (the "ASC") for an order:

  • halting all payments under the vote-buying scheme;
  • terminating the agreements establishing the vote-buying scheme; and
  • reprimanding the Board of directors of Liquor Stores for approving a vote-buying scheme designed to entrench the current Board.

PointNorth has the support of LOGiC Institutional Partners, JC Clark Ltd. and other institutional shareholders and a significant number of retail shareholders for its nominees.  PointNorth feels strongly that vote buying in support of board entrenchment is an improper defensive tactic for boards to use in opposition to shareholder initiated changes to board composition.

On June 8, 2017, Liquor Stores filed a supplement to its management information circular disclosing that it had formed a soliciting dealer group to solicit proxies in favour of each of the director nominees of Liquor Stores set forth in the circular.  Under this arrangement, only if two conditions were both satisfied would they be paid $0.05 per common share voted: (1) if the shares are voted in favour of the Liquor Stores director nominees and (2) if all such nominees are elected to serve as directors at the annual and special shareholder meeting scheduled to be held on June 20, 2017.  This vote-buying scheme uses corporate funds to entrench the current Liquor Stores directors in a desperate act of self-preservation.

Upon learning of the vote-buying scheme, Institutional Shareholder Services Inc. ("ISS") updated its recommendation to alert its clients of Liquor Stores' improper behaviour. "Investors may consider these solicitation fees as an improper defensive tactic that leads to an entrenchment of the incumbents" noting that the "Canadian Coalition for Good Governance (CCGG) has criticized such practice (in comments to Aequitas exchange listing requirements) and [was] strongly opposed to usage of similar fees by Agrium during its 2013 proxy contest."

WARNING: Shareholders who receive a call from their broker to vote the WHITE proxy for management should be aware their broker is being paid by Liquor Stores' current Board to get their vote.

We encourage all shareholders who have a financial advisor or broker to call them and ask if they have agreed to Liquor Stores' vote buying scheme and, if so, how they reconcile that with the trust that has been placed in them.

It is time for a change. Shareholders can do better. Every vote will count no matter how many shares you own.

Vote the BLUE proxy form or BLUE voting instruction form for the six new director nominees before 5:00 p.m. (Toronto time) on June 15, 2017. Even if you have voted the WHITE proxy, it is not too late. A later-dated BLUE proxy will replace any previously voted WHITE proxy.

If you have questions or need help voting, contact Kingsdale Advisors at 1-877-657-5857 or at contactus@kingsdaleadvisors.com.  For more information visit www.FixLIQ.com

About PointNorth Capital

PointNorth, together with its affiliates and associates, is a private equity investment firm formed in Ontario. PointNorth invests, as did its predecessor, in equity and debt situations where it is able to influence operational, financial and strategic direction.

PointNorth invests in companies that are experiencing financial or operational challenges, are in out-of-favour sectors or are otherwise in need of change to drive significant long-term value for stakeholders. PointNorth does not seek to appoint its founders and principals to the boards of directors of companies it invests in, but rather operates by identifying best-in-class independent candidates to nominate for board positions. This commitment to improvements benefits all shareholders, not just PointNorth.

PointNorth has developed the "New Strategy" for Liquor Stores with the input of third party alcohol retail industry experts. As at April 21, 2017, PointNorth beneficially owned or controlled or directed, directly or indirectly, an aggregate of 2,750,000 common shares, representing approximately 9.91% of the common shares in the capital of Liquor Stores.

Forward-Looking Statements and Information

Certain statements contained in this press release, constitute forward-looking statements. The words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions as they relate to Liquor Stores or PointNorth are intended to identify forward-looking statements. Such statements reflect PointNorth's current views and intentions with respect to future events as well as assumptions made by and information currently available to PointNorth, and are subject to certain risks and uncertainties. Although PointNorth considers these assumptions to be reasonable based on the information currently available to it, many factors could cause the actual results, performance, actions or achievements of Liquor Stores or others that may be expressed or implied by such forward-looking statements to materially differ from those described herein should one or more of these risks or uncertainties materialize. Such factors include, but are not limited to, economic, business, competitive and regulatory factors. Readers are cautioned not to place undue reliance on forward-looking statements.

The forward-looking statements contained herein are expressly qualified by this cautionary statement and are made as of the date of this press release. Except as expressly required by law, PointNorth does not intend, and disclaims any intention or obligation to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Liquor Stores' registered office address is Suite 101, 17220 Stony Plain Road, Edmonton, AB Canada T5S 1K6. A copy of this press release may be obtained on Liquor Stores' SEDAR profile at www.sedar.com.

SOURCE PointNorth Capital Inc.

For further information: Ian Robertson, Executive Vice President, Communication Strategy, Kingsdale Advisors, Direct: 416-867-2333, Cell: 647-621-2646, Email: irobertson@kingsdaleadvisors.com

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