SUN-RYPE PRODUCTS LTD. 
By KELOWNA, BC, Jul 25, 2013, 2013 (Canada NewsWire via COMTEX) --TSX: SRF
Sun-Rype Products Ltd. (TSX:SRF) ("Sun-Rype" or the "Company") is pleased to announce that, further to its June 28, 2013, press release, it has now entered into a formal arrangement agreement (the "Arrangement Agreement") with Great Pacific Industries Inc. ("Great Pacific") and SRFAcquisition Inc. ("SRF"), a wholly-owned subsidiary of Great Pacific, to privatize Sun-Rype.
Pursuant to the Arrangement Agreement and subject to the satisfaction of various conditions, SRF will acquire by way of a plan of arrangement under the BusinessCorporations Act (British Columbia) (the "Arrangement") all of the issued and outstanding common shares (the "Common Shares") of Sun-Rype other than those Common Shares held by Great Pacific and its affiliates (collectively, the "SRF Affiliates"). The transaction is valued at approximately CDN$94 million, including the assumption of net debt, liabilities and other obligations and inclusive of the value of approximately 54% of the outstanding Common Shares held by the SRF Affiliates.
Under the terms of the Arrangement Agreement, each Sun-Rype shareholder, other than the SRF Affiliates (the "Public Shareholders"), will receive CDN$7.50 in exchange for each Common Share. The consideration to be received by the Public Shareholders pursuant to the Arrangement represents a greater than 20% premium to the weighted average trading price of the Common Shares for the 20, 30 and 40 trading days, as well as the three month and six month periods, ended prior to the announcement on June 28, 2013, of Great Pacific's proposal to acquire Sun-Rype.
The Board of Directors of Sun-Rype (the "Sun-Rype Board") formed a committee of independent directors (the "Independent Committee") to, among other things, review and evaluate the terms of the proposal from Great Pacific, to obtain and supervise the preparation of a formal valuation of the fair market value of the Common Shares, to make a recommendation to the Sun-Rype Board in respect of the proposal and to negotiate the terms and conditions of the Arrangement Agreement and related matters.
Scotia Capital Inc. ("Scotia Capital") was retained by the Independent Committee to provide, under thesupervision of the Independent Committee, an independent formal valuation prepared in accordance with Multilateral Instrument 61-101 - Protection of Minority Securityholders in Special Transactions ("MI61-101"), and has concluded that, based upon and subject to the assumptions, limitations and qualifications contained in its written valuation, as at July 25, 2013, the fair market value of the Common Shares is in the range of CDN$6.30 to CDN$7.70 per such share. This range implies a midpoint price of CDN$7.00 per Common Share.
Scotia Capital has also provided the Independent Committee and the Sun-Rype Board with a fairness opinion that, based upon and subject to the assumptions, limitations and qualifications contained in its written opinion, as at July 25, 2013, the cash consideration to be received by the Public Shareholders pursuant to the Arrangement is fair, from a financial point of view to such Public Shareholders.
The Arrangement was unanimously recommended by the Independent Committee to the Sun-Rype Board. The Sun-Rype Board (with interested directors abstaining), after receiving the unanimous recommendation of the Independent Committee, has unanimously determined that the consideration to be received by the Public Shareholders pursuant to the Arrangement is fair, from a financial point of view, to the Public Shareholders and that the Arrangement is in the best interests of Sun-Rype and has unanimously approved the Arrangement and the Arrangement Agreement and resolved to recommend that Sun-Rype shareholders vote in favour of the Arrangement.
All of the members of the Sun-Rype Board (other than James A. Pattison), a former director and Sun-Rype's executive officers, who collectively own directly or indirectly or exercise control or direction over approximately 4.36% of the outstanding Common Shares, have entered into support agreements with SRF pursuant to which they have agreed to vote their Common Shares in favour of the Arrangement, subject to the provisions thereof.
The Arrangement is subject to customary Toronto Stock Exchange, Court and regulatory approvals, including, but not limited to, the approval by at least 66 2/3% of the votes cast by shareholders, in person or by proxy, at a special/extraordinary meeting of Sun-Rype's shareholders being called to consider the Arrangement and the approval by the "majority of the minority", being a majority of the votes cast by shareholders other than the SRF Affiliates or other shareholders whose votes may not be included in determining if minority approval is obtained pursuant to MI 61-101.
The special meeting of Sun-Rype shareholders to consider the Arrangement is expected to be held on or about September 24, 2013. An information circular in connection with the Arrangement is expected be mailed to Sun-Rype shareholders by the end of August.
Under the Arrangement Agreement, Sun-Rype has agreed that it will not solicit, assist, initiate, facilitate or encourage any discussions, negotiations, proposals or offers concerning the pursuit of any other acquisition proposals. In addition, SRF has the right to match any competing "superior proposal" (as defined in the Arrangement Agreement) for Sun-Rype in the event such a proposal is made.
Following completion of the Arrangement, the Common Shares will be de-listed from the TSX and Sun-Rype will apply to cease to be a reporting issuer under applicable securities laws. Sun-Rype will continue to be run by its current management team led by Mr. Dave McAnerney.
Sun-Rype Products Ltd., based in Kelowna, BC, is a manufacturer and marketer of fruit-based juices and snacks. Sun-Rype is a publicly traded Canadian company with its common shares listed on the Toronto Stock Exchange under the symbol SRF.
Forward Looking Statements
Statements contained in this press release, which are not based on historical fact, including without limitation, statements containing the words "may", "will", "plans", "intends", "expects", "anticipates", "believes", "estimate", "continue" and similar expressions, constitute "forward looking information" within the meaning of applicable Canadian securities laws. Forward looking statements contained in this document may involve, but are not limited to, statements relating to the Company's objectives, priorities, strategies, actions, targets, expectations and outlook. Forward looking statements are necessarily based upon assumptions and predictions with respect to the future, including but not limited to the factors referred to below. As a result, forward looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied thereby. These risks, uncertainties and other factors include, but are not limited to, changes in the consumer packaged goods industry and external market factors, as well as the factors referred to in the Company's Annual Information Form dated March 6, 2013, and its other filings with the applicable Canadian securities regulatory authorities. In light of these uncertainties, assumptions and risks, readers are cautioned not to place undue reliance on such forward looking statements. Except as required by law, the Company assumes no obligation to update or revise such information to reflect later events or developments.
SOURCE: Sun-Rype Products Ltd.
To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/July2013/25/c9821.html
SOURCE: Sun-Rype Products Ltd.
Dave McAnerney President & Chief Executive Officer Sun-Rype Products Ltd. 1165 Ethel Street Kelowna, BC V1Y 2W4 Tel:(250) 860-7973 Fax:(250) 762-3611 ceo@sunrype.com www.sunrype.com
|
distributed by
|
