TORONTO, Jan. 20, 2021 /CNW/ - Canopy Rivers Inc.
("Rivers" or the "Company") (TSX: RIV) (OTC: CNPOF)
today filed and mailed the management information circular (the
"Circular") and related materials in connection with the
special meeting (the "Meeting") of shareholders to be held
virtually on February 16, 2021 at
10:00 a.m. (Toronto time).
In light of the ongoing coronavirus pandemic and to mitigate
against its risks, the Meeting will be held in a virtual only
format via live audio webcast, available to all stakeholders at
http://web.lumiagm.com/261351529, password "canopy2021" (case
sensitive). During the audio webcast, shareholders will be able to
hear the Meeting live, and registered shareholders and duly
appointed and registered proxyholders will be able to submit
questions and vote while the Meeting is being held.
At the Meeting, shareholders will be asked to consider and, if
deemed advisable, to pass a special resolution approving the
previously announced plan of arrangement (the "Transaction")
with Canopy Growth Corporation ("Canopy Growth") (TSX: WEED,
NASDAQ: CGC), pursuant to which Rivers will transfer three
portfolio assets to Canopy Growth in exchange for $115 million in cash, 3,750,000 common
shares1 in Canopy Growth, and the
cancellation of all the multiple voting shares ("MVS") and
subordinate voting shares ("SVS") of Rivers held by Canopy
Growth. As part of the Transaction, the Company will also change
its corporate name to "RIV Capital Inc."
In addition, Rivers is pleased to announce that on January 14, 2020, it was granted an interim order
by the Ontario Superior Court of Justice (Commercial List) (the
"Court") authorizing various matters, including the holding
of the Meeting and the mailing of the Circular.
The Company's board of directors, other than certain conflicted
directors (the "Board"), unanimously approved the
Transaction following a unanimous recommendation of a special
committee, which was composed of directors independent of Canopy
Growth, TerrAscend Corp. ("TerrAscend") and management of
Rivers. Both the special committee and the Board determined that
the Transaction is fair to, and in the best interests of, the
Company and unanimously recommend that shareholders vote in
favour of the Transaction at the Meeting.
Benefits to Rivers Shareholders
Rivers believes the Transaction will propel the Company to its
next phase of growth. The Company believes the Transaction will
provide the following benefits, among others:
- Enables the Company to access new investment
opportunities: Upon completion of the Transaction, the Company
will be in a position to comprehensively re-evaluate its business
and investment strategy and pursue previously unavailable
opportunities, and in particular, investments in, or acquisitions
of, opportunities in the U.S. market. As such investments or
acquisitions may be inconsistent with the policies of the TSX, the
Company is initiating the process to de-list from the TSX and list
its securities on a stock exchange that does not prohibit such
investments or acquisitions.
- Unlocks value for the Company: The Transaction allows
the Company to unlock and realize the value of the TerrAscend
exchangeable shares, which have significant liquidity restrictions
and the value of which has not been adequately reflected in the
Company's share price, as well as its interest in Les Serres Vert
Cannabis Inc., a private company for which there is no published
market.
- Provides significant value and liquidity for the
Company: The consideration payable by Canopy Growth pursuant to
the Transaction is comprised of cash and highly liquid securities,
which provides the Company with significant value and liquidity at
a price that may not be available in the short to medium term in
the absence of the Transaction, particularly in an uncertain
economic and market environment. The Company will also have
significant capital to pursue potential material investments in, or
acquisitions of, established operating businesses in the U.S.
cannabis market, many of which continue to experience uncertain and
constrained access to capital.
- Eliminates the Company's dual-class share structure:
Upon closing of the Transaction, the Company and its shareholders
will derive a number of benefits associated with the elimination of
the Company's dual class share structure, including that:
-
- shareholders will have a vote that is proportionate to their
relative economic interest in the Company; and
- the Company's shares will be more attractive for purposes of
raising capital or as an acquisition currency.
Meeting Materials
Shareholders should refer to the
Circular and related materials for detailed instructions on how to
vote and participate at the Meeting. The Circular also contains
important information regarding the Transaction, and a summary of
the events leading up to the Transaction, including the reasons
that led the Board to determine that the Transaction is fair to
Rivers and in the best interest of the Company. The Circular and
related materials are available on the Company's profile at
www.sedar.com.
Shareholders can also view the Transaction details in a
presentation prepared by the Company, available
at www.canopyrivers.com/investors.
Meeting Details
The Transaction requires the approval
of at least (a) two-thirds of the votes cast by both: (i) Canopy
Growth as the holder of all of the MVS; and (ii) Rivers
shareholders that hold SVS, and (b) a simple majority of the votes
cast by holders of SVS, excluding the votes attached to the SVS
held by Canopy Growth. Canopy Growth has agreed to vote all of its
MVS and SVS in favour of the Transaction.
Funds managed by JW Asset Management, the Company's largest
holder of SVS, and each of the Company's directors and executive
officers, which in aggregate represent approximately 24.5% of the
outstanding SVS, excluding the SVS held by Canopy Growth, have
entered into voting support agreements agreeing to vote their SVS
in favour of the Transaction.
Shareholders who are unable to virtually attend the Meeting are
encouraged to complete, sign, date and return the form of proxy or
voting instruction form provided with the meeting materials so that
as many shareholders as possible are represented at the
Meeting.
For any questions or assistance with voting their proxies,
shareholders should contact Kingsdale Advisors, the strategic
shareholder advisor and proxy solicitation agent, by telephone at
1-800-749-9052 (416-867-2272 for collect calls outside of
North America) or by email at
contactus@kingsdaleadvisors.com.
About Canopy Rivers
Canopy Rivers is a venture
capital firm specializing in cannabis with a portfolio of 17
companies across various segments of the cannabis value chain. We
believe that bringing together people, capital, and ideas raises
the potential of the entire cannabis industry. By leveraging our
industry insights, in-house expertise, and thesis-driven approach
to investing, we aim to provide shareholders with exposure to
specialized and disruptive cannabis companies. Our mission is to
invest in innovators across the cannabis value chain, help them
grow, and ultimately create value by guiding these companies
towards a monetization event. Together with our portfolio, we are
helping build the cannabis industry of tomorrow, today.
Forward Looking Statements
This news release
contains statements which constitute "forward-looking information"
within the meaning of applicable securities laws, including
statements regarding the plans, intentions, beliefs and current
expectations of Canopy Rivers with respect to future business
activities and operating performance. To the extent any
forward-looking information in this news release constitutes
"financial outlooks" within the meaning of applicable Canadian
securities laws, the reader is cautioned that this information may
not be appropriate for any other purpose and the reader should not
place undue reliance on such financial outlooks. Forward-looking
information is often identified by the words "may", "would",
"could", "should", "will", "intend", "plan", "anticipate",
"believe", "estimate", "expect" or similar expressions, and
forward-looking information in this news release includes, but is
not limited to, information and statements regarding: whether and
when the Transaction will be consummated; the anticipated benefits
of the Transaction, the Company's expectation that the Transaction
will significantly strengthen the Company's capital and liquidity
position, the anticipated cash proceeds from the Transaction net of
the associated tax liability and transaction costs, the anticipated
benefits associated with the elimination of the Company's dual
class share structure; the attractiveness of the Company's shares
as acquisition currency following the Transaction; the price and
liquidity of the Canopy Growth common shares; the Company's
intention to invest, acquire and/or merge with operating U.S.
cannabis companies and the value to be derived therefrom; the
Company's belief that operating businesses in the U.S. cannabis
market experience uncertain and constrained access to capital; the
possibility that the Company may de-list from the TSX following
completion of the Transaction and list its securities on a stock
exchange that permits investments in and/or acquisitions of U.S.
cannabis companies; the anticipated timing of the Meeting and the
requisite shareholder approvals to be obtained at the Meeting; the
Company obtaining and/or satisfying customary approvals and
conditions, including court approval for the Transaction; and
expectations for other economic, business, and/or competitive
factors.
Investors are cautioned that forward-looking information is
not based on historical fact but instead reflects management's
expectations, estimates or projections concerning future results or
events based on the opinions, assumptions and estimates of
management considered reasonable at the date the statements are
made. Although the Company believes that the expectations reflected
in such forward-looking information are reasonable, such
information involves risks and uncertainties, and undue reliance
should not be placed on such information, as unknown or
unpredictable factors could have material adverse effects on future
results, performance or achievements of the Company. Financial
outlooks, as with forward-looking information generally, are,
without limitation, based on the assumptions and subject to various
risks as set out herein.
Among the key factors that could cause actual results to
differ materially from those projected in the forward-looking
information are the following: the parties' ability to consummate
the Transaction; the ability to receive, in a timely manner and on
satisfactory terms, all necessary regulatory, court, shareholder,
and other third party approvals; the ability of the parties to
satisfy, in a timely manner, all other conditions to the closing of
the Transaction; the potential impact of the announcement or
consummation of the Transaction on relationships, including with
regulatory bodies, stock exchanges, lenders, employees and
competitors; the diversion of management time on the Transaction;
assumptions concerning the Transaction and the operations and
capital expenditure plans of the Company following completion of
the Transaction; credit, liquidity and additional financing risks
for the Company and its investees; stock market volatility;
regulatory and licensing risks; changes in cannabis industry growth
and trends; changes in the business activities, focus and plans of
the Company and its investees and the timing associated therewith;
the Company's actual financial results and ability to manage its
cash resources; changes in general economic, business and political
conditions, including challenging global financial conditions and
the impact of the novel coronavirus pandemic; competition risks;
potential conflicts of interest; the regulatory landscape and
enforcement related to cannabis, including political risks and
risks relating to regulatory change; changes in applicable laws;
changes in the global sentiment towards, and public opinion of, the
cannabis industry; divestiture risks; competition risks; and the
risk factors set out in the Circular and Canopy Rivers' annual
information form dated June 2, 2020,
filed with the Canadian securities regulators and available on
Canopy Rivers' profile on SEDAR at www.sedar.com.
Should one or more of these risks or uncertainties
materialize, or should assumptions underlying the forward-looking
information prove incorrect, actual results may vary materially
from those described herein as intended, planned, anticipated,
believed, estimated or expected. Although the Company has attempted
to identify important risks, uncertainties and factors that could
cause actual results to differ materially, there may be others that
cause results not to be as anticipated, estimated or intended. The
Company does not intend, and does not assume any obligation, to
update this forward-looking information except as otherwise
required by applicable law.
______________________
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1 In the
event that certain rights of first refusal in respect of the
Company's common equity interest in Les Serres Vert Cannabis Inc.
are exercised, the number of shares issued by Canopy Growth to
Rivers in connection with the Transaction would be reduced by
approximately 103,000 shares, and in lieu, the Company would
receive cash consideration of approximately $3.4 million from a
third party.
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SOURCE Canopy Rivers Inc.