TORONTO,
July 4, 2014 /CNW/ - Dacha Strategic
Metals Inc. (TSX-V: DSM) ("Dacha") announced today that it has
entered into a definitive acquisition agreement with Merus Labs
International Inc. ("Merus") (TSX: MSL, NASDAQ: MSLI) pursuant to
which Dacha will complete the balance of its previously announced
investment of at least $11 million in
Merus.
As contemplated by the letter agreement between
Dacha and Merus that Dacha announced on June
10, 2014, the acquisition agreement provides that Merus will
acquire from Dacha, in exchange for common shares of Merus ("Merus
Shares"), a new subsidiary to be incorporated by Dacha ("Newco")
and to which Dacha will contribute a minimum of $6 million cash by way of equity
subscriptions. The number of Merus Shares that Dacha will
receive in exchange for Newco will equal Newco's cash on hand at
closing divided by $1.70.
On June 12, 2014,
Dacha announced that it had subscribed for $5 million of Merus Shares at a price of
$1.70 per share as part of the bought
deal financing that Merus completed on June
19, 2014. Therefore, upon completion of the transactions
contemplated by the acquisition agreement, it is expected that
Dacha will have acquired a total of at least approximately
$11 million of Merus Shares at a
price of $1.70 per share, and the
Merus Shares will represent substantially all of Dacha's assets.
Subject to receiving all necessary regulatory and shareholder
approvals, Dacha intends to distribute the Merus Shares to its
shareholders as soon as reasonably possible following completion of
its sale of Newco to Merus with a view to ultimately winding up its
operations. This would involve, among other things, delisting
Dacha's shares from the TSX Venture Exchange and Dacha ceasing to
be a reporting issuer.
The acquisition agreement has been unanimously
approved by the Dacha board of directors. Completion of the
transaction is conditional upon the conditions to closing set forth
in the acquisition agreement, which include receipt of all
necessary stock exchange approvals, receipt of Dacha shareholder
approval and no material adverse change with respect to Merus Labs
or Dacha. If the transaction has not been completed by August 31, 2014, either party may terminate the
acquisition agreement.
Dacha will be seeking shareholder approval for
the sale of Newco to Merus, and for those actions required to
facilitate the distribution of the Merus Shares to its
shareholders, at Dacha's annual and special meeting of shareholders
in August 11, 2014. Certain Dacha
shareholders, who hold approximately 29.9% of the outstanding Dacha
common shares, have signed voting support agreements with Merus
pursuant to which they have agreed that they will vote their Dacha
common shares in favour of the sale of Newco at the meeting.
Further details regarding the proposed sale of Newco to Merus and
the distribution of Merus Shares to Dacha shareholders will be set
out in Dacha's management information circular that will be mailed
to shareholders in advance of the meeting.
Forward-Looking Statements
This release contains certain "forward looking
statements" and certain "forward-looking information" as defined
under applicable Canadian securities laws. Forward-looking
statements and information can generally be identified by the use
of forward-looking terminology such as "may", "will", "expect",
"intend", "estimate", "anticipate", "believe", "continue", "plans"
or similar terminology. Forward-looking statements and information
include, but are not limited to, statements with respect to the
transactions contemplated under the acquisition agreement, receipt
of the requisite regulatory and shareholder approvals in respect
thereof and Dacha's intention to distribute the Merus Shares to its
shareholders and wind up its operations thereafter. Forward-looking
statements and information are subject to various known and unknown
risks and uncertainties, many of which are beyond the ability of
Dacha to control or predict, that may cause Dacha's actual results,
performance or achievements may be materially different from those
expressed or implied thereby, and are developed based on
assumptions about such risks, uncertainties and other factors set
out here in, including but not limited to: the risk that the
transaction will not be approved by the TSX, the TSXV or Nasdaq or
the Dacha shareholders; risks and uncertainties related to the
transaction not being completed in the event that the other
conditions precedent thereto are not satisfied and other related
risks and uncertainties. Dacha undertakes no obligation to update
forward-looking information except as required by applicable law.
Such forward-looking information represents management's best
judgment based on information currently available. No
forward-looking statement can be guaranteed and actual future
results may vary materially. Accordingly, readers are advised not
to place undue reliance on forward-looking statements or
information.
Completion of the sale of Newco to Merus Labs
is subject to a number of conditions, including TSXV acceptance and
shareholder approval. The transaction cannot close until the
required shareholder approval is obtained. There can be no
assurance that the transaction will be completed as proposed or at
all.
Investors are cautioned that, except as
disclosed in the Management Information Circular to be prepared in
connection with the transaction, any information released or
received with respect to the transaction may not be accurate or
complete and should not be relied upon. Trading in the securities
of Dacha should be considered highly speculative.
The TSX Venture Exchange has in no way passed
upon the merits of the proposed transaction and has neither
approved nor disapproved the contents of this press
release.
SOURCE Dacha Strategic Metals Inc.