TORONTO, Jan. 4, 2022 /CNW/ - Leon's Furniture Limited
(TSX: LNF) ("LFL", or the "Company") announced today
the final results of its "modified Dutch auction" substantial
issuer bid to purchase (the "Offer") for cancellation up to
$200,000,000 of its common shares
(the "Common Shares") from holders of Common Shares
("Shareholders") for cash. The Offer expired at 5:00 p.m. (Eastern time) on December 30, 2021 (the "Expiration
Date").
Based on the final count by the TSX Trust Company, as depositary
(the "Depositary") for the Offer, the Company has taken up
and paid for 7,999,993 Common Shares at a price of $25.00 per Common Share under the Offer,
representing an aggregate purchase price of approximately
$200,000,000 and approximately 10.4%
of the total number of the Company's issued and outstanding Common
Shares before giving effect to the Offer. All Common Shares
purchased by the Company under the Offer will be cancelled by the
Depositary. After giving effect to the Offer, LFL will have
68,793,903 Common Shares issued and outstanding.
An aggregate of 9,813,872 Common Shares were validly tendered
and not withdrawn pursuant to auction tenders at or below the
purchase price and purchase price tenders. Since the Offer was
oversubscribed, Shareholders who made auction tenders at or below
the purchase price and purchase price tenders had approximately
81.5% of their successfully tendered Common Shares purchased by LFL
(other than "odd lot" tenders, which were not subject to
proration).
The Company has made payment for the Common Shares tendered and
accepted for purchase by tendering the aggregate purchase price to
the Depositary, and payment to the Shareholders will be completed
by the Depositary in accordance with the Offer and applicable laws.
Payment for the Common Shares will be made in cash, without
interest. Any Common Shares not purchased, including Common Shares
not purchased as a result of proration, Common Shares tendered
pursuant to auction tenders at prices higher than $25.00 per Common Share or Common Shares that
were not validly tendered will be returned to the tendering
Shareholder promptly by the Depositary. With the expiry of the
Offer, the Company expects to recommence purchases under its normal
course issuer bid pursuant to an automatic share purchase plan.
For Canadian federal income tax purposes, a deemed dividend
arises on the repurchase of Common Shares under the Offer. To
assist Shareholders in determining the Canadian income tax
consequences of the Offer, LFL has determined that for purposes of
the Income Tax Act (Canada)
(the "Tax Act"), the paid-up capital per Common Share is estimated
to be approximately $2.19 on the
Expiration Date. Shareholders should review the Issuer Bid Circular
dated November 17, 2021 for more
information, including information about the tax treatment of
deemed dividends (refer to Section 9, "Income Tax Considerations –
Certain Canadian Federal Income Tax Considerations"). LFL
designates the entire amount of the deemed dividend arising from
its repurchase of the Common Shares under the Offer as an "eligible
dividend" for purposes of the Tax Act and any corresponding
provincial and territorial tax legislation.
The "specified amount" for the purposes of subsection 191(4) of
the Tax Act in respect of each Common Share is $25.23.
The full details of the Offer are described in the offer to
purchase and issuer bid circular dated November 17, 2021, as well as the related letter
of transmittal and notice of guaranteed delivery, copies of which
were filed and are available on SEDAR at www.sedar.com.
This press release is for informational purposes only and does
not constitute an offer to buy or the solicitation of an offer to
sell the Company's Common Shares.
Forward Looking Statements
This press release may
contain forward-looking information within the meaning of
applicable securities regulation. The words "may", "will", "would",
"should", "could", "expects", "plans", "intends", "trends",
"indications", "anticipates", "believes", "estimates", "predicts",
"likely" or "potential" or the negative or other variations of
these words or other comparable words or phrases, are intended to
identify forward-looking statements. These statements include,
without limitation, statements regarding the timing of payment and
settlement for Common Shares purchased under the Offer. The Company
believes the expectations reflected in the forward-looking
statements in this press release are reasonable but no assurance
can be given that these expectations will prove to be correct and
such forward- looking statements should not be unduly relied upon.
Forward-looking information is based on a number of assumptions and
is subject to a number of risks and uncertainties that may cause
the results or events mentioned in this press release to differ
materially from those that are discussed in or implied by such
forward-looking information. These risks and uncertainties include,
but are not limited to, general, local economic, and business
conditions. All forward-looking information in this press release
speaks as of the date hereof. The Company does not undertake to
update any such forward-looking information whether as a result of
new information, future events or otherwise. Additional information
about these assumptions and risks and uncertainties is disclosed in
filings with securities regulators filed on SEDAR
(www.sedar.com).
About Leon's Furniture Limited
LFL is the largest retailer of furniture, appliances and
electronics in Canada. Our retail
banners include: Leon's; The Brick; Brick Outlet; and The Brick
Mattress Store. Finally, with The Brick's Midnorthern Appliance
banner alongside with Leon's Appliance Canada banner, this makes
the Company the country's largest commercial retailer of appliances
to builders, developers, hotels and property management companies.
The Company has 304 retail stores from coast to coast in
Canada under various banners. The
Company operates three websites: leons.ca, thebrick.com and
furniture.ca.
SOURCE Leon's Furniture Limited