The Rocky Mountain Dealerships Inc. logo is pictured in a handout photo. THE CANADIAN PRESS/HO, Rocky Mountain Dealerships Inc.
December 11, 2020 - 8:13 AM
CALGARY - Rocky Mountain Dealerships Inc. says the cash price being offered for its shares under a go-private transaction led by its chairman and CEO is being enriched by about six per cent.
The Calgary-based company, which says it is the largest farm equipment dealer in Canada with 36 locations in Alberta, Saskatchewan and Manitoba, says the offer was increased to $7.41 from $7 per share after discussions with shareholders including Derek Stimson, a director for 13 years.
On Tuesday, the company issued a brief news release saying that Stimson had resigned effective the previous day and adding a warning to shareholders that it had become aware of "certain proxy solicitation activities" that were contrary to securities laws.
In its Friday release, it says Stimson has now agreed to vote his 9.6 per cent equity stake in favour of the transaction at a special meeting to be held next Thursday, adding that Polar Asset Management Partners Inc. has also pledged to vote its 8.9 stake in favour. That takes committed support to about 32 per cent..
The enhanced deal values the company at $144 million (or $195 million including debt net of cash and lease obligations, and excluding floor plan payables).
In trading on the Toronto Stock Exchange on Friday, Rocky Mountain quickly rose by about seven per cent to match the new offering price, which the company says represents a 34.2 per cent premium to the closing share price on Oct. 30, the last trading day before the deal was announced.
"We are delighted to receive Derek Stimson's support for the proposed transaction," said chairman Matthew Campbell, who controls the numbered company making the offer with CEO Garrett Ganden.
"Mr. Stimson has been a key contributor to RME's accomplishments since its formation and we continue to value our relationship with him."
This report by The Canadian Press was first published Dec. 11, 2020.
Companies in this story: (TSX:RME)
News from © The Canadian Press, 2020