The owner of Winnipeg’s Fort Garry Brewing and Surrey-based Russell Brewing is set to sell those companies to separate buyers.
Vancouver-based Russell Breweries said Friday it plans to sell Fort Garry to an unnamed purchaser for about $7.7 million and Russell Brewing to a B.C. numbered company for $1.8 million.
Russell Breweries, whose shares trade on the TSX Venture Exchange, described the Fort Garry buyer only as “a newly established Manitoba-based limited partnership, backed by one of the largest diversified private equity/venture capital firms within the Prairie provinces.”
The Vancouver brewery’s numbered buyer, meanwhile, is owned by two investors, Yong Lin and Xiaomin Wang, Russell said.
The two sales, which stem from a “long and extensive strategic review process” that the company’s board said it launched early last year, are expected to close by the end of next month, following a shareholder meeting to approve the deals.
“We look forward to closing these two transactions and providing a return of capital to our shareholders in the near future,” Russell CEO Benjamin Li Yu said in the company’s release.
After deduction of debts and transaction expenses, the two deals’ aggregate gross proceeds of about $9.5 million are expected to yield about a 35 per cent premium on the average price of Russell’s TSXV-traded shares from the previous 120 days, the company said.
The deals still allow Russell to consider “unsolicited superior proposal(s)” for either brewery, the company said. It would be able to walk away from either the Winnipeg or Vancouver deals for more lucrative offers, on payment of break fees of $750,000 and $160,000 respectively.
Russell Brewing, which has operated in the Strawberry Hill area of Surrey since 1995, took over Fort Garry Brewing in 2007. The latter company, in 1999, resurrected the Fort Garry beer brand that was established in 1930. Molson took over the original Fort Garry brewery in 1960 and shut it in 1990.
The parent company’s minority shareholders, including Denver Smith and Premier Diversified Holdings, have already agreed to vote their shares in favour of the two deals, Russell Breweries said Friday.
Russell Breweries, which in 2015 booked $1.6 million in net income and comprehensive income on $7.9 million in net revenue, last year set up a “poison pill” policy to block unsolicited takeover bids and fought off a bid from Premier Diversified Holdings for 51 per cent control.
Premier Diversified in July agreed to accept two seats on Russell Breweries’ board and cap its ownership stake at 19.99 per cent. — AGCanada.com Network