VANCOUVER,
Dec. 20, 2012 /CNW/ - Granville
Pacific Capital Corporation ("Granville" TSXV: GE) announces that
it has entered into an arrangement agreement (the "Arrangement
Agreement") with H&H Total Care Services Inc. ("H&H")
pursuant to which it is proposed that H&H will acquire all of
the issued and outstanding common shares of Granville by way of a
plan of arrangement under the Business Corporations Act
(Alberta).
The cash consideration (the "Consideration") to
be paid for each common share of Granville, other than common
shares held by H&H or Hendrik van Ryk,
Sr., under the Arrangement Agreement will be Cdn$0.08 per common share. This represents over a
300% premium over the closing price of Cdn$0.025 per share of Granville on the TSX
Venture Exchange on December 19,
being the last closing price prior to this announcement.
H&H has negotiated the Arrangement Agreement
on behalf of itself and Hendrik van Ryk
Sr., its sole shareholder (together, the "Purchaser"). As of
today's date, the Purchaser holds 5,241,670 common shares in the
capital of Granville, representing approximately 41.56% of the
total issued and outstanding common shares.
As a result, the Purchaser is a related party to
Granville, as such term is defined in Multilateral Instrument
61-101 - Protection of Minority Securityholders in Special
Transactions ("MI 61-101") and the arrangement to be completed
pursuant to the Arrangement Agreement (the "Arrangement") will be
conditional upon, among other things, the approval of the majority
of the minority of Granville's shareholders (excluding members of
the Purchaser and their affiliates). It is expected that an
annual and special meeting of the shareholders of Granville to
approve annual matters and to approve the Arrangement will be held
in mid-February 2013 (the "Meeting").
The Arrangement is also conditional upon customary terms for
transactions of this nature including there being not more than 5%
of the Granville shareholders who exercise their right of dissent
in respect of the Arrangement and the approvals of the TSX Venture
Exchange and the Court of Queen's Bench Alberta. Further
particulars of the Meeting, the Arrangement and the Arrangement
Agreement will be communicated to shareholders in due course.
If all approvals are obtained and other
conditions met, it is expected that the Arrangement will be
completed by the beginning of March, 2013. Upon completion of
the transactions contemplated in the Arrangement Agreement,
Granville will be delisted from the TSX Venture Exchange.
The independent members of the board of
directors of Granville (the "Independent Committee") have
determined that the Arrangement is fair to Granville shareholders
(other than the Purchaser), that it is in the best interest of
Granville to enter into the Arrangement Agreement, and has agreed
to recommend that Granville shareholders vote to approve the
Arrangement at the Meeting.
Evans & Evans Inc. is acting as financial
advisor to the Independent Committee with respect to the
Arrangement. Evans & Evans has provided a fairness opinion
indicating that the consideration to be received by Granville
shareholders, other than the Purchaser, under the Arrangement is
fair from a financial point of view. A copy of the fairness
opinion will be included in the information circular to be provided
to the shareholders of Granville prior to the Meeting.
Paul Stevenson,
one of the members of the Independent Committee, said: "The offer
of $0.08 per share represents fair
value to shareholders. Our financial advisor, Evans & Evans,
Inc., used a combination of commonly used asset and income
valuation methodologies to value the company in order to assess the
offer. They concluded that the offer was fair from a financial
point of view."
Andre van Ryk,
speaking on behalf of the Purchaser, said: "Granville has not
been successful as a public company for a long time. Although
it is a stable small cap company, it is not the type of story that
the resource-oriented Canadian junior market is interested
in. We remain supportive of Granville and its business model,
but the costs of remaining public, the lack of need for further
financing, and the inability to provide liquidity to its
shareholders, led us to the conclusion that it was better for
Granville to continue as a private company."
Granville has agreed that it will not solicit or
initiate discussions or negotiations with any third party
concerning any sale of any material position or assets of
Granville, or any business combination involving Granville, and
Granville has provided H&H the right to match, under certain
circumstances, any subsequent offer. An expense reimbursement fee
will be payable to H&H if the Arrangement Agreement is
terminated under certain limited circumstances.
The directors and officers of Granville who own
Granville have signed lock-up agreements agreeing to vote any
shares held by them in favour of the Arrangement at the
Meeting.
About Granville
Granville is involved in the business of the
acquisition and operation of senior citizens' lodging, care
facilities and mental health facilities. Granville is a
publicly-traded company and trades under the symbol "GE" on the TSX
Venture Exchange. More information on the company and its
operations is available under Granville's public profile on SEDAR
at www.sedar.com.
Forward-looking statements
Except for statements of historical fact,
this news release contains certain 'forward-looking information'
and 'forward-looking statements' within the meaning of applicable
securities laws. Such forward-looking statements are based on the
opinions and estimates of management at the date the statements are
made, and are subject to known and unknown risks, uncertainties and
assumptions that could cause actual results to vary materially from
the anticipated results or events predicted in these
forward-looking statements, including the failure to complete the
Arrangement on a timely basis, if at all, the impact of general
economic conditions, industry conditions, governmental regulation,
volatility of commodity prices, currency fluctuations,
environmental risks, the inability to obtain required consents,
permits or approvals and competition from other industry
participants. As a result, readers are cautioned not to place undue
reliance on these forward-looking statements. The
forward-looking statements contained in this news release are made
as of the date of this release. Except as required by applicable
law, Granville disclaims any intention and assumes no obligation to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
SOURCE Granville Pacific Capital Corp.