CALGARY,
AB, Oct. 21, 2024 /CNW/ - SNDL Inc. (Nasdaq:
SNDL) ("SNDL") and Nova Cannabis Inc. (TSX: NOVC)
("Nova") are pleased to announce the closing of the
previously announced plan of arrangement (the "Arrangement")
pursuant to which SNDL has acquired all of the issued and
outstanding common shares in the capital of Nova ("Nova
Shares") not already owned by SNDL, representing approximately
34.8% of the Nova Shares. The Arrangement was approved by at least
two-thirds of the holders of Nova Shares ("Nova
Shareholders") and the majority of disinterested Nova
Shareholders under Multilateral Instrument 61-101 - Protection
of Minority Security Holders in Special Transactions at a
special meeting of the Nova Shareholders on October 16, 2024. The Court of King's Bench of
Alberta granted a final order
approving the Arrangement on October 17,
2024. All financial information in this press release is
reported in Canadian dollars unless otherwise indicated.
Pursuant to the Arrangement, each Nova Shareholder (other than
SNDL and its affiliates that hold Nova Shares) will receive
$1.75 in cash for each Nova Share (the "Cash Consideration"),
representing a premium of 41.2% to the 20-day volume weighted
average trading price of Nova Shares on the Toronto Stock Exchange
(the "TSX") as of market close on August 12, 2024, the date prior to the
announcement of the Arrangement, other than Nova Shareholders that
validly elected to receive, in lieu of the Cash Consideration, 0.58
of a common share of SNDL ("SNDL Shares") for each
Nova Share (the "Share
Consideration" and, collectively with the Cash Consideration,
the "Consideration"), subject to proration and a maximum of
50% of the aggregate Consideration being payable in SNDL Shares.
Nova Shareholders representing a total of 275,507 Nova Shares
elected to receive an aggregate of 159,792 SNDL Shares as Share
Consideration. Nova Shareholders representing a total of 21,305,023
Nova Shares elected (or were deemed to have elected) to receive
$37,283,790.25 as Cash
Consideration.
"The acquisition of Nova's remaining minority interest
represents a significant milestone that will streamline SNDL's
cannabis retail operations and generate material savings by
eliminating public company expenses," said Zachary George, SNDL's Chief Executive Officer.
"With a debt-free and cash-rich balance sheet we are
well-positioned to drive the continued expansion of our Canadian
cannabis retail platform. We intentionally and successfully
structured this transaction to incentivize shareholders to opt for
cash, which further underscores our focus on accretive growth,
allowing us to efficiently deploy capital without significant share
dilution."
The Nova Shares are expected to be delisted from the TSX
and the OTC Markets. Following the delisting of the Nova
Shares, Nova intends to submit an application to cease to be a
reporting issuer in each applicable jurisdiction of
Canada pursuant to applicable
securities laws, and, following which, SNDL intends to amalgamate
with Nova pursuant to the provisions of the Business Corporations
Act (Alberta).
Registered holders of Nova Shares are reminded that they must
send their completed and executed letter of transmittal and
election form and related share certificates or DRS advices, if
any, to the depository for the Arrangement, Odyssey Trust
Company, as soon as possible in order to receive the Consideration
to which they are entitled under the Arrangement.
DIRECTOR APPOINTMENT
In connection with the Arrangement, SNDL intends to appoint to
its board of directors J. Carlo
Cannell, 61, a leading practitioner of special situations
since the formation of Cannell Capital in 1992.
EARLY WARNING REPORTING
Immediately prior to the effective date of the Arrangement, SNDL
and its subsidiaries owned an aggregate of 40,501,641 Nova Shares,
representing approximately 65.2% of the outstanding Nova Shares at
such time. Pursuant to the terms of the Arrangement, SNDL acquired
each of the issued and outstanding Nova Shares (other than those
held by SNDL and its affiliates) for the Consideration. The
aggregate Consideration delivered pursuant to the Arrangement for
Nova Shares (including cash payments in lieu of fractional shares)
was $37,283,790.25 in cash and 159,792 in SNDL
Shares. The closing trading price of a SNDL Share on Nasdaq
on October 18, 2024, the last full trading day prior to the
closing of the Arrangement,
was US$2.02 (approximately C$2.79).
An early warning report will be filed on SEDAR+
at www.sedarplus.ca under Nova's profile. In order to
obtain a copy of the early warning report, please contact
Matthew Husson at
legal@sndl.com.
ADVISORS
McCarthy Tétrault LLP has acted as legal counsel to SNDL.
Eight Capital has acted as financial advisor and Bennett Jones
LLP has acted as legal counsel to Nova.
ABOUT SNDL INC.
SNDL is a public company whose shares are traded on the Nasdaq
under the symbol "SNDL". SNDL is the largest private-sector liquor
and cannabis retailer in Canada
with retail banners that include Ace Liquor, Wine and Beyond,
Liquor Depot, Value Buds, Spirit Leaf, Superette and Firesale. SNDL
is a licensed cannabis producer and one of the largest vertically
integrated cannabis companies in Canada specializing in low-cost biomass
sourcing, indoor cultivation, product innovation, low-cost
manufacturing facilities, and a cannabis brand portfolio that
includes Top Leaf, Contraband, Palmetto, Bon Jak, Versus, Value
Buds, and Vacay. SNDL's investment portfolio seeks to deploy
strategic capital through direct and indirect investments and
partnership throughout the North American cannabis industry.
For more information on SNDL, please go
to www.sndl.com.
ABOUT NOVA CANNABIS INC.
Nova is one of Canada's largest
and fastest-growing cannabis retailers with a goal of disrupting
the cannabis retail market by offering a wide range of high-quality
cannabis products at every-day best value prices. Nova currently
owns and/or operates locations across Alberta, Ontario, British
Columbia and Saskatchewan,
primarily under its "Value Buds" banner. Additional information
about Nova Cannabis Inc. is available at www.sedarplus.ca and
Nova's website at www.novacannabis.ca.
The head office of Nova Cannabis is located at 101, 17220 Stony
Plain Rd. NW, Edmonton, Alberta,
T5S 1K6, Canada.
Forward-Looking Information Cautionary Statement
This news release contains statements and information that, to
the extent that they are not historical fact, may constitute
"forward-looking information" or "forward-looking statements"
within the meaning of applicable securities legislation
("forward-looking information"). Forward-looking information
is typically, but not always, identified by the use of words such
as "will", "expected", "projected", "to be" and similar words,
including negatives thereof, or other similar expressions
concerning matters that are not historical facts. Forward-looking
information in this news release includes, but is not limited to,
statements regarding; the combined company and its focus going
forward; the anticipated delisting of the Nova Shares from the TSX
and OTC Markets (including the timing thereof); Nova's application
to cease to be a reporting issuer (including the timing thereof);
the anticipated amalgamation of SNDL and Nova (including the timing
thereof); and the anticipated benefits associated with the
Arrangement, including any anticipated financial benefits and
growth opportunities. Such forward-looking information is based on
various assumptions and factors that may prove to be incorrect,
including, but not limited to, factors and assumptions with respect
to; the anticipated benefits of the Arrangement; the business and
operations of both SNDL and Nova, including that each business will
continue to operate in a manner consistent with past practice and
pursuant to certain industry and market conditions; and the ability
of SNDL to successfully implement its strategic plans and
initiatives and whether such strategic plans and initiatives will
yield the expected benefits. Although SNDL and Nova believe
that the assumptions and factors on which such forward-looking
information is based are reasonable, undue reliance should not be
placed on the forward-looking information because SNDL and Nova can
give no assurance that it will prove to be correct or that any of
the events anticipated by such forward-looking information will
transpire or occur, or if any of them do so, what benefits SNDL
and/or Nova will derive therefrom. Actual results could differ
materially from those currently anticipated due to a number of
factors and risks including, but not limited to: that the benefits
or the Arrangement will not be as anticipated; risks associated
with general economic conditions; adverse industry events; future
legislative, tax and regulatory developments; conditions in the
liquor and cannabis industries; the risk that Nova is not able to
open additional retail liquor or cannabis stores, directly or
indirectly, as anticipated or at all; the ability of management to
execute its business strategy, objectives and plans; and the
availability of capital to fund the build-out and opening of
additional retail liquor or cannabis stores.
Readers, therefore, should not place undue reliance on any such
forward-looking information. Further, this forward-looking
information is given as of the date of this press release and,
except as expressly required by applicable law, SNDL and Nova
disclaim any intention and undertake no obligation to update or
revise any forward-looking information whether as a result of new
information, future events or otherwise, except as required under
applicable Canadian securities laws. All of the forward-looking
information contained in this release is expressly qualified by the
foregoing cautionary statements.
SOURCE Nova Cannabis Inc.
