AGT Food and Ingredients receives proposal to privatize business
30 Jul 2018 --- AGT Food and Ingredients Inc. (AGT) has received a non-binding proposal from a group comprised of certain members of its management group, led by President and Chief Executive Officer, Murad Al-Katib, to privatize AGT.
Under the proposal, the management group would acquire all of the issued and outstanding Common Shares of AGT pursuant to a plan of arrangement, other than those held by the management group and certain other significant shareholders, for consideration of C$18 (US$13.7) in cash for each Common Share.
The proposal contemplates that Fairfax Financial Holdings Limited and Point North Capital Inc. will retain their equity interests in AGT and current members of the senior management team will remain in their current management positions with AGT after completion of the transaction.
The management group has advised that the proposal has the financial support of Fairfax to provide financing to the management group for the transaction. Completion of the transaction pursuant to the proposal will not be subject to any due diligence but will be subject to all necessary actions of the company’s board of directors shall have been taken.
Al-Katib and other members of the management group, collectively, beneficially own or exercise control or direction over approximately 4,116,008 Common Shares, representing approximately 17 percent of the outstanding Common Shares of AGT. Fairfax beneficially owns or exercises control or direction over 183,700 Common Shares and Point North beneficially owns or exercises control over 2,362,070 Common Shares, collectively, representing approximately 10.5 percent of the outstanding Common Shares of AGT. As well, Fairfax, through certain subsidiaries, also holds 5,714,286 common share purchase warrants of AGT, which were issued in connection with Fairfax's C$190 million (US$145.4 million) investment in AGT through the purchase of the 5.375 percent interest-bearing securities on August 31, 2017.
The Board has agreed to establish a committee comprised of independent directors to consider the Proposal and to conduct all aspects of the company’s response to the proposal. There is no set timetable with respect to the Independent Committee's review, and AGT does not expect to make a further public comment regarding these matters unless and until the Independent Committee approves a specific action or otherwise concludes its review.
There is no assurance that the proposal will proceed and as a result of this announcement, no further purchases of Common Shares will be made under AGT's normal course issuer bid, pending completion of the transaction.
