Granville Announces Proposed Going-Private Transaction

        






Granville Announces Proposed Going-Private Transaction

VANCOUVER, Dec. 20, 2012 /CNW/ - Granville Pacific Capital Corporation ("Granville" TSXV: GE) announces that it has entered into an arrangement agreement (the "Arrangement Agreement") with H&H Total Care Services Inc. ("H&H") pursuant to which it is proposed that H&H will acquire all of the issued and outstanding common shares of Granville by way of a plan of arrangement under the Business Corporations Act (Alberta).

The cash consideration (the "Consideration") to be paid for each common share of Granville, other than common shares held by H&H or Hendrik van Ryk, Sr., under the Arrangement Agreement will be Cdn$0.08 per common share. This represents over a 300% premium over the closing price of Cdn$0.025 per share of Granville on the TSX Venture Exchange on December 19, being the last closing price prior to this announcement.

H&H has negotiated the Arrangement Agreement on behalf of itself and Hendrik van Ryk Sr., its sole shareholder (together, the "Purchaser"). As of today's date, the Purchaser holds 5,241,670 common shares in the capital of Granville, representing approximately 41.56% of the total issued and outstanding common shares.

As a result, the Purchaser is a related party to Granville, as such term is defined in Multilateral Instrument 61-101 - Protection of Minority Securityholders in Special Transactions ("MI 61-101") and the arrangement to be completed pursuant to the Arrangement Agreement (the "Arrangement") will be conditional upon, among other things, the approval of the majority of the minority of Granville's shareholders (excluding members of the Purchaser and their affiliates).  It is expected that an annual and special meeting of the shareholders of Granville to approve annual matters and to approve the Arrangement will be held in mid-February 2013 (the "Meeting"). The Arrangement is also conditional upon customary terms for transactions of this nature including there being not more than 5% of the Granville shareholders who exercise their right of dissent in respect of the Arrangement and the approvals of the TSX Venture Exchange and the Court of Queen's Bench Alberta.  Further particulars of the Meeting, the Arrangement and the Arrangement Agreement will be communicated to shareholders in due course.

If all approvals are obtained and other conditions met, it is expected that the Arrangement will be completed by the beginning of March, 2013.  Upon completion of the transactions contemplated in the Arrangement Agreement, Granville will be delisted from the TSX Venture Exchange.

The independent members of the board of directors of Granville (the "Independent Committee") have determined that the Arrangement is fair to Granville shareholders (other than the Purchaser), that it is in the best interest of Granville to enter into the Arrangement Agreement, and has agreed to recommend that Granville shareholders vote to approve the Arrangement at the Meeting.

Evans & Evans Inc. is acting as financial advisor to the Independent Committee with respect to the Arrangement. Evans & Evans has provided a fairness opinion indicating that the consideration to be received by Granville shareholders, other than the Purchaser, under the Arrangement is fair from a financial point of view.  A copy of the fairness opinion will be included in the information circular to be provided to the shareholders of Granville prior to the Meeting.

Paul Stevenson, one of the members of the Independent Committee, said: "The offer of $0.08 per share represents fair value to shareholders. Our financial advisor, Evans & Evans, Inc., used a combination of commonly used asset and income valuation methodologies to value the company in order to assess the offer. They concluded that the offer was fair from a financial point of view."

Andre van Ryk, speaking on behalf of the Purchaser, said:  "Granville has not been successful as a public company for a long time. Although it is a stable small cap company, it is not the type of story that the resource-oriented Canadian junior market is interested in. We remain supportive of Granville and its business model, but the costs of remaining public, the lack of need for further financing, and the inability to provide liquidity to its shareholders, led us to the conclusion that it was better for Granville to continue as a private company."

Granville has agreed that it will not solicit or initiate discussions or negotiations with any third party concerning any sale of any material position or assets of Granville, or any business combination involving Granville, and Granville has provided H&H the right to match, under certain circumstances, any subsequent offer. An expense reimbursement fee will be payable to H&H if the Arrangement Agreement is terminated under certain limited circumstances.

The directors and officers of Granville who own Granville have signed lock-up agreements agreeing to vote any shares held by them in favour of the Arrangement at the Meeting.

About Granville

Granville is involved in the business of the acquisition and operation of senior citizens' lodging, care facilities and mental health facilities.  Granville is a publicly-traded company and trades under the symbol "GE" on the TSX Venture Exchange. More information on the company and its operations is available under Granville's public profile on SEDAR at www.sedar.com.

Forward-looking statements

Except for statements of historical fact, this news release contains certain 'forward-looking information' and 'forward-looking statements' within the meaning of applicable securities laws. Such forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to known and unknown risks, uncertainties and assumptions that could cause actual results to vary materially from the anticipated results or events predicted in these forward-looking statements, including the failure to complete the Arrangement on a timely basis, if at all, the impact of general economic conditions, industry conditions, governmental regulation, volatility of commodity prices, currency fluctuations, environmental risks, the inability to obtain required consents, permits or approvals and competition from other industry participants. As a result, readers are cautioned not to place undue reliance on these forward-looking statements.  The forward-looking statements contained in this news release are made as of the date of this release. Except as required by applicable law, Granville disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise

Neither 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.

SOURCE Granville Pacific Capital Corp.

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