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Press release from CNW Group

Leon's and The Brick announce receipt of competition act approval and set closing date for arrangement; The Brick announces details of offer to purchase 12% debentures

Monday, March 11, 2013

Leon's and The Brick announce receipt of competition act approval and set closing date for arrangement; The Brick announces details of offer to purchase 12% debentures21:32 EDT Monday, March 11, 2013CALGARY, March 11, 2013 /CNW/ - Leon's Furniture Limited (TSX: LNF) and The Brick Ltd. (TSX: BRK) are pleased to announce that the Commissioner of Competition has issued a "No-action" letter in connection with the previously announced plan of arrangement pursuant to which Leon's will acquire all of the outstanding common shares of The Brick and all of the outstanding common share purchase warrants of The Brick will be purchased for cancellation.  Leon's and The Brick also announce that, subject to the satisfaction or waiver of the remaining conditions to closing outlined in the arrangement agreement dated November 11, 2012 between Leon's and The Brick, they have agreed to close the arrangement on March 28, 2013.The No-action letter confirms that the Commissioner, following an extensive review of the proposed arrangement, does not intend to challenge the acquisition of The Brick by Leon's before the Competition Tribunal under the merger provisions of the Competition Act (Canada). The Commissioner retains the right to challenge the transaction for one year after closing. The issuance of the No-action letter, along with the approval from the Superintendent of Insurance (Alberta) received on February 11, 2013, satisfies all of the required regulatory approvals contemplated in the arrangement agreement.For each common share held by a shareholder of The Brick, the shareholder can elect to receive as consideration $5.40 in cash per common share or 0.0054 convertible debentures of Leon's per common share, as described in The Brick's management information circular dated November 23, 2012 and subject to the terms and conditions described therein. For each warrant held by a warrantholder of The Brick, the warrantholder can elect to receive as consideration $4.40 in cash per warrant or 0.0044 convertible debentures of Leon's per warrant, as described in the circular and subject to the terms and conditions described therein.The deadline for The Brick's registered shareholders and warrantholders to submit letters of transmittal and elect to receive either cash or convertible debentures for their securities is 5:00 p.m. (Eastern Time) on March 25, 2013. In order to elect the form of consideration they wish to receive, The Brick's registered shareholders and warrantholders are reminded that they must sign and return a completed letter of transmittal (or letters of transmittal) to Computershare Investor Services Inc., as depositary, together with the accompanying certificate (or certificates) representing the securities, by the election deadline. The Brick's non-registered shareholders and warrantholders should carefully follow the instructions from the intermediary that holds securities on their behalf in order to make an election with respect to the form of consideration they wish to receive. Any letter of transmittal, once deposited with the depositary, will be irrevocable and may not be withdrawn by a shareholder or warrantholder.The Brick's shareholders and warrantholders who have not made an election by the election deadline will be deemed to have elected to receive the cash consideration for their common shares or warrants.Additional copies of letters of transmittal may be requested from Computershare via telephone at 1-800-564-6253 or via email at corporateactions@computershare.com. Copies of letters of transmittal are also available on The Brick's website (www.thebrick.com) and on the SEDAR website at www.sedar.com.The Brick's Change of Control Offer to Purchase 12% DebenturesIn connection with the arrangement, and pursuant to the terms of the indenture governing The Brick's 12% Senior Secured Debentures due May 30, 2014 (CUSIP No. 107879AA6), The Brickis also commencing an offer to purchase for cash any and all of its outstanding debentures on the terms and conditions set out in the offer to purchase of The Brick dated March 11, 2013.Details regarding the OfferThe offer for any and all of the outstanding debentures commences on March 11, 2013 and will expire at 11:59 p.m. (Eastern Time) on April 8, 2013, unless extended or earlier terminated. Registered holders of the debentures that wish to receive the consideration (as outlined below) must validly tender their debentures on or prior to the expiration time. Tenders of debentures are irrevocable and may not be withdrawn. As at the date hereof, there is approximately $32,833,000 principal amount of debentures outstanding.If the conditions to the offer described in the offer to purchase are satisfied or waived, then debentures properly tendered pursuant to the offer will be accepted for payment immediately after the expiration time, and the respective holders thereof will be entitled to receive for each $1,000 principal amount at maturity of such debentures an amount in cash equal to (i) $1,100 plus (ii) accrued and unpaid interest to, but not including, the date of payment. The payment date is expected to occur on April 11, 2013. The Brick expects to fund the purchase of the debentures pursuant to the offer from cash on hand and borrowings under an inter-company loan from Leon's.The debentures of holders who do not accept the offer will remain outstanding and will continue to accrue interest on their existing terms until May 30, 2014. For so long as the debentures remain outstanding, all rights and obligations of The Brick and the holders pursuant to the indenture governing the debentures will continue to remain in effect and unchanged. However, after the completion of the offer, one or more of the following may occur: (i) The Brick may apply to delist the debentures from the Toronto Stock Exchange; (ii) The Brick may cease to be a reporting issuer; and (iii) Leon's may elect to provide a full and unconditional guarantee of the payments to be made by The Brick under the debentures in order to permit The Brick to rely on an exemption from the continuous disclosure requirements of applicable securities laws.Computershare Investor Services Inc. has been retained to act as the depositary for the offer. For additional information regarding the terms of the offer, requests for documents and questions regarding the tendering of debentures, please contact: The Brick at 16930 - 114 Avenue, Edmonton, Alberta, T5M 3S2, Attention: Corporate Secretary, telephone (780) 930-6000. Copies of the offer to purchase are also available electronically on The Brick's website (www.thebrick.com) and on the SEDAR website at www.sedar.com.Only registered holders will be eligible to tender their debentures pursuant to the offer. Non-registered holders whose debentures are registered in the name of an intermediary, or in the name of a clearing agency (such as CDS) of which the intermediary is a participant, should promptly contact their intermediaries and follow their intermediaries' instructions with respect to the applicable tender procedures and deadlines, which may be earlier than the deadlines that are set out in this press release.This press release does not constitute an offer to sell or purchase, or a solicitation of an offer to sell or purchase, or the solicitation of tenders with respect to, the debentures. No offer, solicitation, purchase or sale will be made in any jurisdiction in which such an offer, solicitation, or sale would be unlawful. The offer is being made solely pursuant to the offer to purchase made available to holders of the debentures. None of The Brick, the depositary or their respective affiliates is making any recommendation as to whether or not holders should tender all or any portion of their debentures in the offer. Holders are urged to evaluate carefully all information in the offer to purchase, consult their own investment and tax advisors and make their own decisions whether to tender debentures.About Leon'sLeon's was founded in 1909 and is one of Canada's best-known home furnishings retailers offering great value on household furniture, mattresses, appliances and home electronics. Leon's has 76 stores in Newfoundland and Labrador, Quebec, Ontario, Manitoba, Saskatchewan, Alberta, Nova Scotia, New Brunswick, and Prince Edward Island.About The BrickThe Brick, which opened its first store in Edmonton, Alberta in 1971, has grown over the last 40 years to become one of Canada's leading retailers of household furniture, mattresses, appliances and home electronics.  The Brick has 229 stores operating under The Brick, United Furniture Warehouse, The Brick Mattress Store and Urban Brick banners.Forward-Looking StatementsThis news release contains "forward-looking statements" within the meaning of applicable Canadian securities laws, including (but not limited to) statements about: completion of the proposed transaction; expected timing; and similar statements concerning anticipated future events, results, circumstances, performance or expectations, that reflect management's current expectations and are based on information currently available to management of Leon's, The Brick and their respective subsidiaries. The words "may", "will", "should", "believe", "expect", "plan", "anticipate", "intend", "estimate", "predict", "potential", "continue" or the negative of these terms, or other expressions which are predictions of or indicate future events and trends and which do not relate to historical matters, identify forward-looking matters. The following factors could cause actual results to differ materially from those discussed in the forward looking statements: failure to satisfy the conditions to complete the arrangement; the failure of Leon's to satisfy conditions to its acquisition financing; the occurrence of any event, change or other circumstance that could give rise to the termination of the arrangement agreement; retention of customers, suppliers and personnel being adversely affected by the uncertainty surrounding the arrangement; inability to successfully integrate the operations of the two companies following completion of the transaction; and other factors discussed in documents filed with the securities commissions across Canada by Leon's and The Brick. Reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of Leon's or The Brick to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. Leon's and The Brick undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by applicable law.SOURCE: The Brick Ltd.For further information: For Leon's: Dominic Scarangella Vice-President and CFO Leon's Furniture Limited (416) 243-4073 dominic.scarangella@leons.ca For The Brick: Vi Konkle President and CEO The Brick Group (780) 930-6300 investor@thebrick.com Ken Grondin CFO and President, Financial Operations The Brick Group (780) 930-6300 investor@thebrick.com