Our roundup of Canadian small-caps of between $100-million and $2.5-billion in market capitalization making news and on the move today.
A group of shareholders of Hudson’s Bay Co. (HBC-T) that collectively own approximately 57 per cent of the outstanding common shares “on an as-converted basis,” issued a statement outlining what they believe are “compelling reasons” to support the proposed arrangement to take HBC private for $10.30 per share in cash.
According to the release issued Monday, the reasons include immediate value to HBC minority shareholders at a 62-per-cent premium. The release also says it's the "best and final offer" in a deteriorating and uncertain retail landscape.
"Despite HBC’s best efforts to adapt, HBC’s stock price and valuation continues to reflect ongoing risk and uncertainty," the release states, adding that, "After an extensive strategic review process, the Special Committee did not identify any alternative that was more attractive than the proposed transaction."
Minority shareholders vote at special meeting of shareholders on Dec. 17.
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Organigram Holdings Inc. (OGI-Q, OGI-T) is delaying the completion of the final phase of its Moncton campus, after a disappointing fourth quarter where sales declined 34 per cent compared to the preceding quarter.
Organigram’s sharp drop in quarterly revenue – $16.3-million in Q4, down from $24.8-million in Q3– is in line with company guidance released earlier in the month. The company said it sold $20-million worth of product, but took a $3.7-million “provision for product returns and pricing adjustments.”
“The majority of the provision was largely related to two slower selling stock-keeping units (SKUs) sold to the Ontario Cannabis Store (OCS), comprised of a bespoke order of lower THC dried flower intended to fulfill a supply gap in the market earlier this year and THC oils which have seen less than anticipated demand in the adult-use recreational market,” the company said.
Organigram also took a $1.6-million writedown on inventory. It reported an adjusted EBITDA loss of $7.9-million.
“The lack of a sufficient retail network and slower than expected store openings in Ontario continued to impact revenue growth in Q4 2019 and were further exacerbated by increased industry supply. Quarter to quarter revenue is expected to continue to be volatile due to the timing of large pipeline orders for Ontario, in particular, where there is a centralized distribution model and where store additions are difficult to forecast.,” the company said.
The company said it is delaying the completion of phase 4C of its Moncton facility, which is 70 per cent done, “until there is more clarity on the timing and magnitude of the retail network expansion.”
– Mark Rendell
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Charlotte’s Web Holdings, Inc. (CWEB-T) announced it has an agreement with a syndicate of underwriters to buy 5 million units of the company at $13.25 each for proceeds of $66.25-million.
Each unit includes one common share and one half of one common share purchase warrant exercisable for 2 years at exercise price of $16.50 per warrant share.
Net proceeds will be used "primarily to fund the company's business development and for general working capital purposes."
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Quarterhill Inc. (QTRH-T, QTRH-Q) announced that its WiLAN division has entered into a license agreement and settled all pending wireless patent litigation with LG Electronics.
"Subject to the license agreement, LG has obtained a multi-year license to certain WiLAN patents related to wireless technology," the company stated. "This is the second license LG has taken to WiLAN's wireless patent portfolio; the first license LG received from WiLAN was concluded in 2010."
It said the license fees paid to WiLAN and all other terms of this agreement are confidential.
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Wajax Corp. (WJX-T) announced an agreement with a syndicate of underwriters to purchase, on a bought-deal basis, $50-million principal amount of listed senior unsecured debentures at a price of $1,000 each with an interest rate of 6 per cent per year. The debentures will mature on January 15, 2025. The debentures will not be redeemable before January 15, 2023. The debentures will not be convertible into common shares at the option of the holders at any time, the company stated.
Wajax said it intends to use the net proceeds of the offering to repay debt under existing credit facilities.