Lakeview to be Acquired in All Cash Transaction for its Outstanding Securities and Assumption of Certain Outstanding Debt

WINNIPEG, MB, Nov. 10, 2021 /CNW/ - Lakeview Hotel Investment Corp. ("Lakeview" or the "Company") (TSXV: LHR) announced today that it has entered into an arrangement agreement dated November 9, 2021 (the "Arrangement") with 13487407 Canada Inc. ("Parent"), 13487369 Canada Inc. ("Share Purchaser") and 13487326 Canada Inc. ("Debenture Purchaser", and together with Parent and Share Purchaser, the "Purchasers"), newly formed private companies which are managed by First Canadian Management Corporation ("FCMC"), pursuant to which: (i) Share Purchaser has agreed to acquire all of the outstanding common shares of Lakeview for $0.02 per share in cash for aggregate consideration of $391,156.12; (ii) Debenture Purchaser has agreed to acquire all of the outstanding Series C Debentures and all of the Series D Debentures of Lakeview for $74.03 per $1,000 principal amount outstanding under the Series C Debentures and the Series D Debentures, for aggregate consideration of $1,356,673.78 and $752,144.80, respectively, and any and all accrued and unpaid interest owing to the Debentureholders shall be forgiven, settled and extinguished for no consideration; and (iii) Share Purchaser has agreed to pay to LHIC or to the benefit of LHIC approximately $15,000,000 for LHIC to pay and satisfy all amounts owing by LHIC to its lending syndicate led by ATB Financial, and to pay certain costs associated with the foregoing transaction (the "Transaction"). 

TRANSACTION HIGHLIGHTS

• The consideration for issued and outstanding shares is $0.02.  The closing price of the shares on the TSX-V on November 9, 2021, the last trading date prior to the public announce of the Arrangement was $0.025 (TSX-V Symbol: LHR). 
• The consideration for the issued and outstanding Series C Debentures of the Company is $74.03 per $1,000 principal amount outstanding (or $7.403 per $100 principal amount outstanding).  The closing price of the Series C Debentures on the TSX-V on November 9, 2021, the last trading date prior to the public announce of the Arrangement was $1.65 (TSX-V Symbol: LHR) based on a face value of $100.
• The consideration for the issued and outstanding Series D Debentures of the Company is $74.03 per $1,000 principal amount outstanding (or $7.403 per $100 principal amount outstanding).  The closing price of the Series D Debentures on the TSX-V on November 9, 2021, the last trading date prior to the public announce of the Arrangement was $1.15 (TSX-V Symbol: LHR.DB.D) based on a face value of $100.
• FCMC and the Purchasers are all arms' length to Company.  
• There are currently 19,557,806 Common Shares outstanding, 18,326 Series C Debentures ($18,326,000 principal amount), and 101,600 Series D Debentures ($10,160,000 principal amount).  Immediately following closing, the foregoing securities will remain outstanding with the Shares registered in the name of the Share Purchaser and the Debentures registered in the name of the Debenture Purchaser.           

TRANSACTION DETAILS

The transaction, which will be completed by way of a plan of arrangement (the "Arrangement"), is expected close in late December 2021, subject to the satisfaction of certain closing conditions.

Completion of the transaction is subject to customary closing conditions, including court approval of the Arrangement and the approval of the Arrangement by Lakeview shareholders, Series C Debentureholders and Series D Debentureholders, each voting separately as a single class (together with any majority of the minority voting approvals required under applicable Canadian securities laws).

The foregoing summary is qualified in its entirety by the provisions of the Arrangement Agreement, a copy of which will be filed on SEDAR at www.sedar.com. Lakeview will mail a management information circular and certain related documents to shareholders in connection with the special meeting to consider and vote on the Transaction, copies of which will also be filed on SEDAR at www.sedar.com.  

LAKEVIEW BOARD OF DIRECTORS RECOMMENDATION AND FAIRNESS OPINION

The Board of Directors, after receiving the unanimous recommendation of the Special Committee, and in consultation with its legal advisors, has unanimously determined that the Transaction is in the best interests of Lakeview and fair to shareholders and debentureholders and is recommending that shareholders and debentureholders, respectively, vote in favour of the Transaction.

Tw Advisory has provided a fairness opinion to the Special Committee and Board of Directors that based upon and subject to the assumptions and limitation described in its opinion, the consideration to be received by shareholders and debentureholders, respectively, pursuant to the Transaction is fair, from a financial point of view, to the shareholders and debentureholders, respectively.

ADVISORS

Fillmore Riley LLP is acting as legal counsel to the Company. De Grandpré Chait S.E.N.C.R.L./LLP is acting as legal counsel to the Purchasers.  Tw Advisory has provided the Special Committee and the Board of Directors with a fairness opinion in respect of the Transaction.  Thompson Dorfman Sweatman LLP is acting as legal counsel to the Special Committee.  Colliers Hotels is acting as advisor to the Company. 

ABOUT LAKEVIEW HOTEL INVESTMENT CORP.

Lakeview is a Canada-based company engaged in hotel operations, which includes room rental, food and beverage, and other incidental services.  The Company operates a portfolio of five hotels, being: Lakeview Inn and Suites, Okotoks; Lakeview Inn and Suites, Fort Saskatchewan; Lakeview Inn and Suites, Fort St. John; Lakeview Inn and Suites, Chetwynd; and Lakeview Inn & Suites, Edson Airport West.

ABOUT FIRST CANADIAN MANAGEMENT CORP.

First Canadian Management Corp. is a private company which, through its related group of companies, owns and manages various hotels throughout Canada.  The Parent, Share Purchaser and Debenture Purchaser are each a special purpose vehicle which are managed by FCMC and which have been constituted for purposes of concluding the Transaction.

FORWARD-LOOKING INFORMATION

This news release contains forward-looking information and statements within the meaning of applicable Canadian securities laws (herein referred to as "forward-looking statements") that involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. All information and statements in this news release which are not statements of historical fact may be forward-looking statements. The words "believe", "expect", "intend", "estimate", "anticipate", "project", "scheduled", and similar expressions, as well as future or conditional verbs such as "will", "should", "would", and "could" often identify forward-looking statements. In particular, forward-looking statements in this news release include, but are not limited to: the closing of the Transaction on the terms and timing set out herein or at all, and the payment of the termination fee to the Parent in certain circumstances or at all. Such statements or information are only predictions and reflect the current beliefs of management with respect to future events and are based on information currently available to management. Actual results and events may differ materially from those contemplated by these forward-looking statements due to these statements being subject to a number of risks and uncertainties.

Undue reliance should not be placed on these forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature forward-looking statements involve assumptions and known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions and other forward-looking statements will not occur. Some of the assumptions made by Lakeview, upon which such forward-looking statements are based include, but are not limited to: the closing of the Transaction on the terms set out herein or at all, the payment of the reverse termination fee in certain circumstances, and the receipt of requisite approvals and financing for the Transaction.   

A number of factors could cause actual results to differ materially from those expressed or implied by the forward-looking statements, including, but not limited to: prevailing economic conditions; unexpected changes in the financial markets (including in the trading price of the securities of Lakeview); changes in the general economic and business conditions of one or more of Lakeview and its subsidiaries, and any of the conditions to the Transaction not being satisfied. Should any of the risks or uncertainties facing Lakeview and its subsidiaries materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance, activities or achievements could vary materially from those expressed or implied by any forward-looking statements contained in this news release. Readers are cautioned that the foregoing list of risks is not exhaustive. Additional information on these and other factors that could affect the operations or financial results of Lakeview and its subsidiaries are included in the information circular in connection with the meeting to approve the Arrangement, a copy of which will be available under Lakeview's profile on SEDAR (www.sedar.com).  

Although Lakeview believes that the expectations represented by any forward-looking statements contained herein are reasonable based on the information available to it on the date of this news release, management cannot assure investors that actual results, performance or achievements will be consistent with these forward-looking statements. Any forward-looking statements herein contained are made as of the date of this news release and Lakeview does not assume any obligation to update or revise them to reflect new information, events or circumstances, except as required by law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Lakeview Hotel Investment Corp

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