Board of Directors Recommends that Shareholders vote FOR the
Arrangement
/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES
OR FOR DISSEMINATION IN THE UNITED
STATES/
TORONTO, Aug. 19,
2024 /CNW/ - Sleep Country Canada Holdings Inc.
("Sleep Country" or the "Company") (TSX: ZZZ), is pleased to
announce that it has filed and is in the process of mailing the
management proxy circular (the "Circular") and related materials
for the special meeting (the "Meeting") of the Company's
shareholders (the "Shareholders") to be held on September 18, 2024, to approve the previously
announced plan of arrangement under the Canada Business
Corporations Act (the "Arrangement"), pursuant to which
16133258 Canada Inc. (the "Purchaser"), a newly-formed and
wholly-owned subsidiary of Fairfax Financial Holdings Limited
("Fairfax") (TSX: FFH) (TSX: FFH.U) will acquire all of the issued
and outstanding common shares of Sleep Country for C$35.00 in cash per common share (the
"Consideration"), all as more particularly described in the
Circular.
Unanimous Recommendation of the Board of Directors and
Benefits of the Arrangement to Shareholders
The Arrangement was reviewed and overseen by a Special Committee
of the Board of Directors (the "Special Committee"). The Board of
Directors, on the unanimous recommendation of the Special
Committee, in consultation with its financial and legal advisors,
and following consideration of a number of factors, unanimously
determined that the Arrangement is fair to Shareholders and is in
the best interests of Sleep Country, and recommended that
Shareholders vote in favour of the Arrangement at the Meeting. The
factors considered by the Board of Directors and the Special
Committee are detailed in the Circular and include:
- Significant Premium. The Consideration offered to
Shareholders under the Arrangement represents a 34% premium to the
20-day volume-weighted average price of the common shares on the
Toronto Stock Exchange for the period ending on July 19, 2024, and a 28% premium to the closing
price on July 19, 2024, the last
trading day prior to the announcement of the Arrangement.
- Certainty of Value and Liquidity. The Consideration
offered to Shareholders under the Arrangement is all cash, which
allows Shareholders to immediately realize value for all of their
investment. It also provides certainty of value and immediate
liquidity in comparison to the risks and uncertainties to achieving
equivalent value for the common shares by remaining a public
company.
- Compelling Value Relative to Strategic Alternatives. The
Special Committee and the Board of Directors concluded, after
consultation with the Company's management and financial advisors,
that the value offered to Shareholders under the Arrangement is
more favourable to Shareholders than the value that could
potentially result from other alternatives reasonably available to
the Company, including a continuation of the status quo as a
standalone entity, within a reasonably foreseeable timeframe.
Additional information related to the benefits and related risks
of the Arrangement are contained in the Circular.
Interim Order
The Company is pleased to also announce that the Company has
been granted an interim order (the "Interim Order") from 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 Meeting is to be held in
accordance with the terms of the Interim Order.
Competition Act Approval
The Company is also pleased to announce that on August 5, 2024, the Commissioner of Competition
under the Competition Act (Canada) issued an advance ruling
certificate under Section 102 of the Competition Act
(Canada), which allows the parties to complete the Arrangement as
of the date of the advance ruling certificate and constitutes the
Competition Act Approval for the purposes of the arrangement
agreement dated July 21, 2024 among
the Company, the Purchaser and Fairfax (the "Arrangement
Agreement").
Meeting and Circular
The Meeting will be held as a virtual-only meeting conducted
by live webcast at https://web.lumiagm.com/218125307 (password:
sleep2024) on September 18, 2024 at
10:00 a.m. (Toronto time). Proxies must be received by
the Company's transfer agent, Odyssey Trust Company, either online
at https://login.odysseytrust.com/pxlogin, or in person, or by mail
or courier, at Trader's Bank Building, 702 – 67 Yonge Street,
Toronto, ON, M5E 1J8, not later
than 10:00 a.m. (Toronto time) on September 16, 2024 (or no later than 48 hours,
excluding Saturdays, Sundays and statutory holidays in the city of
Toronto, before any reconvened
meeting if the Meeting is adjourned or postponed). If a Shareholder
holds its common shares through an investment advisor, broker,
bank, trust company, custodian, nominee, clearing agency or other
intermediary, a completed voting instruction form should be
deposited in accordance with the instructions printed on the
form.
At the Meeting, Shareholders will be asked to consider and, if
deemed advisable, pass a special resolution approving the
Arrangement. In order to be effective, the Arrangement will be
subject to the approval of (i) at least 66 2/3% of the votes cast
by Shareholders present in person virtually or represented by proxy
at the Meeting; and (ii) a simple majority of the votes cast by
Shareholders present in person virtually or represented by proxy at
the Meeting, excluding votes from certain Shareholders, as required
under Multilateral Instrument 61-101 – Protection of Minority
Security Holders in Special Transactions. In addition to
Shareholder approval, the Arrangement is subject to approval by the
Court as well as the satisfaction of certain other customary
closing conditions.
The Circular provides important information regarding the
Arrangement and related matters, including the background to the
Arrangement, the reasons for recommendation of the Special
Committee and the Board of Directors, voting procedures and how to
virtually attend the Meeting. Shareholders are urged to read the
Circular and its appendices carefully and in their entirety. The
Circular is being mailed to Shareholders in compliance with
applicable laws and the Interim Order. The Circular is available
under the Company's issuer profile on SEDAR+ at www.sedarplus.ca as
well as on the Company's website at
https://www.sleepcountrypoa.com/.
Shareholder Questions and Assistance
If you have any questions or need assistance in your
consideration of the Arrangement or with the completion and
delivery of your proxy, please contact the Company's strategic
advisor, Kingsdale Advisors, at 1-888-518-1565 (toll-free in
North America) or 1-416-623-2513
(text and call enabled outside of North
America) or by email to
contactus@kingsdaleadvisors.com.
Advisors and Counsel
CIBC Capital Markets is acting as financial advisor and Davies
Ward Phillips & Vineberg LLP is acting as legal advisor to
the Special Committee and the Company. Blair Franklin Capital
Partners is acting as financial advisor to the Special Committee,
including providing a fixed-fee fairness opinion regarding the
Arrangement. Torys LLP is acting as legal advisor to Fairfax.
Forward-Looking Information
Certain information in this news release contains
forward-looking information and forward-looking statements, which
reflect our current view with respect to anticipated events as well
as the Company's objectives, plans, goals, strategies, outlook,
results of operations, financial and operating performance,
prospects and opportunities. Wherever used, the words "may",
"will", "anticipate", "expect", and similar expressions, identify
forward-looking information and forward-looking statements.
Forward-looking information herein includes statements regarding:
the reasons for, and the anticipated benefits of, the Arrangement;
the timing for mailing of the Circular; the timing of various steps
to be completed in connection with the Arrangement, including the
anticipated dates for the holding of the Meeting; the timing and
effects of the Arrangement; the solicitation of proxies by the
Company and Kingsdale Advisors, the Company's strategic advisor;
the ability of the parties to satisfy the other conditions to the
closing of the Arrangement; and other statements that are not
historical facts. Forward-looking information and forward-looking
statements should not be read as guarantees of future events,
performance or results, and will not necessarily be accurate
indications of whether, or the times at which, such events,
performance or results will be achieved. All the information in
this news release containing forward-looking information or
forward-looking statements is qualified by these cautionary
statements.
Forward-looking information and forward-looking statements are
based on information available to Sleep Country at the time they
are made, underlying estimates, opinions and assumptions made by
Sleep Country and management's current good faith belief with
respect to future strategies, prospects, events, performance and
results, and are subject to inherent risks and uncertainties
surrounding future expectations generally. Such risks and
uncertainties include, but are not limited to, those described in
the Circular as well as the Company's management's discussion and
analysis ("MD&A") for Q2 2024 under the sections "Risk Factors"
and those described in the Company's 2023 annual information form
(the "AIF") filed on March 6, 2024,
both of which can be accessed under the Company's issuer profile on
SEDAR+ at sedarplus.ca. In addition, forward-looking information in
this news release is subject to a number of additional risks and
uncertainties, including: the possibility that the Arrangement will
not be completed on the terms and conditions, or on the timing,
currently contemplated, and that it may not be completed at all,
due to a failure to obtain or satisfy, in a timely manner or
otherwise, required Shareholder, regulatory and Court approvals and
other conditions of closing necessary to complete the Arrangement
or for other reasons; failure to complete the Arrangement could
negatively impact the price of the common shares or otherwise
affect the business, financial condition or results of the Company;
the Arrangement Agreement may be terminated by the parties in
certain circumstances; the termination fee under the Arrangement
Agreement may discourage other parties from attempting to acquire
the Company or may have an adverse effect on the Company; the
ability of the Board of Directors to consider and approve, subject
to compliance with the terms and conditions of the Arrangement
Agreement, a superior proposal for the Company; significant
transaction costs or unknown liabilities; while the Arrangement is
pending, the Company is restricted from taking certain actions; the
possibility of adverse reactions or changes in business
relationships resulting from the announcement or completion of the
Arrangement; certain of the Company's directors and officers may
have interests in the Arrangement that are different from those of
Shareholders; the exercise of dissent rights by Shareholders may
result in the Arrangement not being completed; risks related to tax
matters; the failure to realize the expected benefits of the
Arrangement; risks relating to the Company's ability to retain and
attract key personnel during the interim period; credit, market,
currency, operational, liquidity and funding risks generally and
relating specifically to the Arrangement, including changes in
economic conditions, interest rates or tax rates; the Company and
the Purchaser may be subject to legal claims, securities class
actions, derivative lawsuits and other claims; and other risks
inherent to the business carried out by the Company and/or factors
beyond its control which could have a material adverse effect on
the Company or its ability to complete the Arrangement. Additional
risks and uncertainties not presently known to the Company or that
the Company currently believes to be less significant may also
adversely affect the Company.
The Company cautions that the list of risk factors and
uncertainties described above and in the Circular, the MD&A for
Q2 2024 and the AIF are not exhaustive and that should certain
risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual strategies, prospects, events,
performance and results may vary significantly from those expected.
There can be no assurance that the actual strategies, prospects,
results, performance, events or activities anticipated by the
Company will be realized or even if substantially realized, that
they will have the expected consequences to, or effects on, the
Company. Readers are urged to consider the risks, uncertainties,
and assumptions carefully in evaluating the forward-looking
information and forward-looking statements and are cautioned not to
place undue reliance on such information and statements. The
Company does not undertake to update any such forward-looking
information or forward-looking statements, whether as a result of
new information, future events or otherwise, except as required by
applicable laws.
About Sleep Country
Sleep Country is Canada's leading specialty sleep retailer with
a purpose to transform lives by awakening Canadians to the power of
sleep. Sleep Country operates under the retailer banners; Sleep
Country Canada, Dormez-vous, the rest, Endy, Silk & Snow, Hush
and Casper Canada. The Company has
omnichannel and eCommerce operations, including 307 corporate-owned
stores and 18 warehouses across Canada. Recognized as one of
Canada's Most Admired Corporate Cultures in 2022 by Waterstone
Human Capital, Sleep Country is committed to building a company
culture of inclusion and diversity where differences are embraced
and valued. The Company actively invests in its sleep ecosystem,
innovative products, world-class customer experience, communities
and its people. For more information about Sleep Country, please
visit https://ir.sleepcountry.ca.
About Fairfax
Fairfax is a holding company which, through its subsidiaries, is
primarily engaged in property and casualty insurance and
reinsurance and the associated investment management.
SOURCE Sleep Country Canada Holdings Inc. Investor Relations