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Planet to Propose Going Private Transaction

newsfilecorp

Calgary, Alberta–(Newsfile Corp. – April 8, 2020) – – Mr. David D. Heighington, a Director of Planet Health Corp. (TSXV: PHL.H) (the “Corporation” or “Planet“), announces that its board of directors has received a proposal from 2255820 Alberta Ltd., a private company that is owned and controlled by Ronald J. Francisco, the President, CEO and a Director of Planet, in connection with a going private transaction (the “Transaction“). Mr. Francisco currently owns 86.08% of the outstanding common shares of Planet (the “Planet Shares“), held indirectly through various private companies which are wholly or partially owned and controlled by Mr. Francisco, and will not participate in the Transaction (the “Non-Participating Shareholders“). The Transaction is expected to be completed on or before June 30, 2020 (the “Effective Date“) and will involve the purchase of approximately 13.92% of Planet’s outstanding Planet Shares owned by public shareholders (“Public Shareholders“) by 2255820 Alberta Ltd. (the “Purchaser“). The net effect of the Transaction will be that Planet will not have any public shareholders. Planet plans to delist from the TSX Venture Exchange on the Effective Date and will apply to the applicable securities commissions to cease being a reporting issuer. Each Public Shareholder would receive $0.20 (the “Consideration“) in cash for each Planet Share held immediately prior to the Transaction becoming effective, representing a 25% premium from the last closing price of $0.15. The Transaction is considered a related party transaction as such term is defined under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI-61-101“).

Planet wishes to complete the going private transaction in order to provide its Public Shareholders with the opportunity to realize part of the value for their Planet Shares, having regard to the fact that Planet has had no active business since listing on the NEX board of the TSX Venture Exchange in 2012, the current weakness in global equity markets, the significant cost of maintaining a public listing, and the Shares are thinly traded. The last three trades were on March 12, 2020 for 1,800 Planet Shares at a price of $0.15 per Planet Share, March 10, 2020 for 1,260 Planet Shares at a price of $0.15 per Planet Share, and March 3, 2020 for 870 Planet Shares at a price of $0.20 per Planet Share. In addition, as noted in Planet’s interim financial statements for the period ended December 31, 2019 (available for review on www.sedar.com), Planet is dependent upon Mr. Francisco to fund operating expenditures in order to continue operations and maintain its listing on the TSXV. Mr. Francisco has advised Planet that he will not provide any future financial support and accordingly the independent directors of Planet believe the Transaction is in the best interest of the company and all stakeholders.

There are currently 3,466,482 voting common shares of Planet issued and outstanding. After completion of the Transaction, the Purchaser and the Non-Participating Shareholders will hold all of the outstanding voting common shares. The Transaction is a going-private transaction and is structured as a Plan of Arrangement under Section 193(1) of the Business Corporations Act (Alberta), and the Transaction is subject to court approval. The Transaction is also subject to shareholder approval by 2/3rds of the voting common shares voted at a Special Meeting (the “Meeting“) of the Corporation to be held before the end of June 2020, and by the approval of a majority of the votes cast by minority shareholders at the Meeting pursuant to the requirements of MI-61-101. The votes of the Purchaser and Non-Participating Shareholders will be included in the 2/3rds corporate approval but not in the approval by the “majority of the minority” pursuant to MI 61-101. If approved at the Meeting, Planet expects the Transaction to be effective on or before June 30, 2020 (the “Effective Date“).

The Board has received a valuation from chartered business valuators Evans & Evans, Inc. (the “Valuation“) in connection with the Transaction. On the basis of its review, including the Valuation which set a valuation of $0.00 on the Planet Shares, the independent Board members have unanimously resolved to recommend to holders of the Planet Shares to vote in favor of the Transaction, which is a significant premium to the Valuation and the last share price of $0.15. The Valuation and all supporting analysis and conclusions, from a financial point of view, of the Consideration to the Public Shareholders, will be included in Planet’s management information circular for the Meeting, a copy of which will be mailed to each Planet shareholder and will also be available under Planet’s profile at www.sedar.com.

The Transaction is subject to the following conditions:

  • execution of a definitive agreement,

  • completion of financing of the purchase price by the Purchaser;

  • dissent rights not being exercised with respect to more than 5% of Planet Shares;

  • Non-Participating Shareholders entering into release agreements with Planet and the Purchaser;

  • court and Planet shareholder approval; and

  • completion by June 30, 2020, or such later date agreed to amongst the parties.

The going private transaction will also eliminate the burden of continuing as a reporting issuer, which has been indirectly funded by loans to Planet from Mr. Francisco since 2012 totaling $654,564. Under applicable securities laws a broad range of regulatory obligations are imposed on companies, such as Planet, with public shareholders, including the provision of quarterly financial statements and information to shareholders, mandatory solicitation of proxies for annual meetings, increased insurance costs, transfer agent and stock exchange fees and compliance cost, and shareholder communication costs. These regulatory requirements necessitate the employment of independent accountants, financial consultants, printers, lawyers and other skilled personnel. Planet believes that the present and anticipated time and costs entailed in meeting the additional disclosure and other regulatory obligations to which public companies are subject cannot be justified in view of Planet’s present business strategy, including it having a limited number of public shareholders and the fact that Mr. Francisco has been the sole source of funding for many years and no longer wishes to lend further money to Planet.

For further information, please contact:

Planet Health Corp.
David D. Heighington, Director
Suite 1150, 707 – 7 Avenue SW
Calgary, Alberta T2P 3H6
Phone: (403) 237-0018

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.

Caution Regarding Forward-Looking Information Forward-looking statements – Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. Forward-looking statements are often, but not always, identified by words such as “believes”, “may”, “likely”, “plans”, or similar words. Forward- looking statements included in this news release include statements with respect to (i) the Corporation’s plan to not have any Public Shareholders; (ii) the Corporation’s plan to de-list from the TSX Venture Exchange; (iii) the Corporation’s plan to apply to cease being a reporting issuer; (iv) expectations regarding the Consideration to be paid to the Public Shareholders; and (v) expectations about the Transaction’s Effective Date. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of the Corporation, including, but not limited to the impact of general economic conditions, industry conditions, currency fluctuations, and dependence upon regulatory approvals. The Transaction is subject to several conditions including (i) respective board approval from the parties; (ii) dissent rights not being exercised with respect to more than 5% of the Planet Shares; (iii) Non-Participating Shareholders entering into release agreements with Planet and the Purchaser; (iv) court and Planet shareholder approval; and (v) completion of the Transaction by June 30, 2020.

There is no guarantee all of these conditions will be satisfied. If any of the conditions to the Transaction are not satisfied, the Transaction may not be completed. Readers should not assume that any or all of the conditions will be met or that the Transaction will be completed by the target date. Readers are cautioned that the assumptions used in the preparation, may prove to be imprecise and, as such, undue reliance should not be placed on the forward-looking statements. The Corporation does not assume any obligation to update the forward-looking statements to reflect changes in assumptions or circumstances other than as required by applicable law.

Not for distribution to U.S. Newswire Services or for dissemination in the United States.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/54280