Rivers Shareholders Approve Plan of Arrangement with Canopy Growth (CGC)
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Canopy Rivers Inc. ("Rivers" or the "Company") (TSX: RIV) (OTC: CNPOF) is pleased to announce that its shareholders voted today to approve the previously announced plan of arrangement (the "Arrangement") involving Canopy Growth Corporation ("Canopy Growth") (TSX: WEED) (NASDAQ: CGC).
Approximately 99.87% of the votes cast by Rivers' shareholders were voted in favour of the Arrangement, including approximately 99.85% of the votes cast by Rivers' shareholders other than Canopy Growth, whose votes were required to be excluded pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions. Approval was required from at least (i) two-thirds of the votes cast by the holders of Subordinated Voting Shares ("SVS"), voting separately as a class; (ii) two-thirds of the votes cast by Canopy Growth, as the sole holder of all of the Multiple Voting Shares ("MVS"), voting separately as a class; and (iii) a simple majority of votes cast by holders of SVS, voting separately as a class, excluding the votes attaching to the SVS held by Canopy Growth.
"We are thrilled by both the high voting turnout and the tremendous support we received for the Arrangement," said Narbe Alexandrian, President and CEO, Rivers. "We believe that this deal provides substantial value to shareholders, which was highlighted by the overwhelming support we received today. We look forward to delivering on this vote of confidence as we execute on our new strategy focused on opportunities in the U.S. market."
Right of First Refusal in respect of the Vert Mirabel Shares
The Company also announced today that Les Serres Stéphane Bertrand Inc. ("Serres Bertrand") has exercised its right of first refusal to purchase its proportionate interest of the common shares (the "ROFR Shares") in Les Serres Vert Cannabis Inc. ("Vert Mirabel") from Rivers, which was triggered as a result of the Arrangement.
Accordingly, the Company, through its wholly-owned subsidiary, RIV Capital Corporation (formerly Canopy Rivers Corporation) ("RCC"), has entered into a definitive purchase agreement (the "Share Purchase Agreement") with Serres Bertrand in respect of the ROFR Shares, pursuant to which RCC will sell to Serres Bertrand 117 ROFR Shares, representing 11.7% of the issued and outstanding common shares of Vert Mirabel, for cash consideration of approximately $3.4 million (the "ROFR Transaction").
The ROFR Transaction is expected to be completed on the same day as the Arrangement, subject to the satisfaction of certain conditions in favour of RCC, including the deposit by Serres Bertrand of the cash consideration, and the consummation of the Arrangement. The Company expects that both the Arrangement and the ROFR Transaction will close prior to the end of February.
The ROFR Transaction will result in a downward adjustment to the number of common shares of Canopy Growth that RCC will receive pursuant to the Arrangement by approximately 103,000 shares, such that RCC will now receive approximately 3.65 million common shares of Canopy Growth. The remaining shares of Vert Mirabel held by RCC will be transferred to Canopy Growth pursuant to the Arrangement. If the conditions to completion of the ROFR Transaction are not satisfied, all of the ROFR Shares will be transferred to Canopy Growth as part of the Arrangement.
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