Independent Trustees of SIR Fund to Commence Strategic Process; Advise Unitholders to Take No Action on Mini Tender at this Time
TORONTO, Jan. 28, 2021 /CNW/ - The Independent Trustees of SIR Royalty Income Fund (TSX: SRV.UN) (the "Fund") today announced that they have determined to initiate a strategic process focused on enhancing unitholder value, including a potential sale of the Fund.
The Fund intends to retain an investment banker to assist with the strategic process, but has not made any decisions related to strategic alternatives at this time, and there can be no assurance that the evaluation of strategic alternatives will result in any transaction or change in current operations. The events leading up to this decision are described below.
As previously disclosed, SIR Corp. ("SIR"), a related party of the Fund, provided to the Independent Trustees a requisition in draft for a meeting of unitholders to consider a transaction that would result in the payment of $3.55 per unit to the Fund's unitholders. The Fund has not yet received a formal requisition for a meeting, but, as a result of the requisition, has asked its independent financial and legal advisors to consider various alternatives that may be available to the Fund.
The Fund has also recently received a preliminary indication of interest from a third party to acquire all of the Fund's units under an all cash offer. No specific price was set out, but the indication of interest indicated that based on publicly available information, any offer would be at a price higher than SIR's proposal. There can be no assurance any offer will be forthcoming, or if forthcoming, completed.
On January 27, 2021, Janes Acquisition Corp. ("Janes") disclosed that it has commenced a mini-tender offer to acquire up to 825,000 units of the Fund at a price of $4.25 per unit. If completed, Janes would own approximately 19.5% of the units on an undiluted basis.
Mini-tender offers are designed such that the acquiror will hold less than 20% of an entity's outstanding equity securities, avoiding disclosure and procedural requirements applicable to most bids under Canadian securities regulations.
According to Janes' offer documents, Fund unitholders who have already tendered their units can withdraw their units at any time before 5:00pm eastern time on February 11, 2021 by following the procedures described in the offer documents.
The Fund does not endorse this unsolicited offer, has no association with Janes or its offer, and recommends that unitholders exercise caution and take no action with respect to the mini-tender pending the Independent Trustees discussing same and other alternatives with its advisors.
The Fund requests that a copy of this news release be included in any distribution of materials relating to Janes' mini-tender offer for the Fund's units.
Forward-Looking Statements and Information and Cautionary Statements
This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "estimate", "may", "will", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking statements or information. Forward-looking statements and information in this press release include, but are not limited to, the intention to conduct a strategic process, the engagement of an investment banker and the possible alternatives that may arise due to such process. Forward-looking statements or information is based on several factors and assumptions which have been used to develop such statements and information, but which may prove to be incorrect, including but not limited to the actual engagement of an investment banker, the strategic process being undertaken and the emergence and completion of a transaction to acquire the Fund units. Although the Fund believes that the expectations and assumptions on which the forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because the Fund cannot give any assurance that they will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. The forward-looking statements and information contained in this press release are made as of the date hereof and the Fund undertakes no obligation to update publicly or revise any forward-looking statement or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
SOURCE SIR Royalty Income Fund
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