Independent Trustees of SIR Fund Update Unitholders with Respect to Mini-Tender
TORONTO, Feb. 8, 2021 /CNW/ - The Independent Trustees of SIR Royalty Income Fund (TSX: SRV.UN) (the "Fund") wish to update Fund unitholders regarding the mini-tender offer by Janes Acquisition Corp. ("Janes") to acquire up to 825,000 units of the Fund at a price of $4.75 per unit. The mini-tender expires 5:00 p.m. eastern time on February 11, 2021.
The Independent Trustees believe, among other things, that the mini-tender:
- is being made at a time where the trading price of the units is not fully reflective of the underlying value of the Fund because of Covid-19 and its devastating effect on the restaurant industry and the fact the Fund cannot make distributions; in its press release accompanying the mini-tender, the controlling shareholder of Janes states that he sees long term value in the units;
- may be considered coercive because it is an offer for less than all of the units where tendering unitholders are likely to be significantly pro-rated and is structured to avoid compliance with the procedural and substantive provisions of the Canadian take-over bid regime; and
- is misleading in certain respects as the press release accompanying the mini-tender refers to a decision of SIR Corp. ("SIR") and the Trustees of the Fund to stop all distributions. The Independent Trustees note that such a decision was not made voluntarily, but was agreed to with SIR's senior lender as a condition to various covenant waivers. The press release also indicates that Janes is committed to working with the Independent Trustees of the Fund to seek out every alternative that can maximize value for all unitholders, but the Independent Trustees note that Janes has not approached them in that regard.
However, the Independent Trustees of the Fund have determined to make NO RECOMMENDATION as to whether Fund unitholders should accept or reject the mini-tender as:
- they recognize that the mini-tender will provide limited liquidity to unitholders at a price higher than the current trading price,
- there is no guarantee that the strategic process they are undertaking will result in an offer for the units, or, if it does, the price at which such an offer will be made, and
- there is no certainty as to what price the units will trade at after expiration of the mini-tender and such price may be less than the amount offered under the mini-tender.
The Independent Trustees encourages Fund unitholders to make their own decisions regarding whether or not to accept the mini-tender.
No Fund unitholder is required to accept or tender their units to the mini-tender. A Fund unitholder is entitled to do nothing and not accept the mini-tender.
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 undertaking of a strategic process or an offer for the units. 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 strategic process being undertaken, the emergence and completion of a transaction to acquire the Fund units and any price at which the Fund units may trade. 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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