Ginger Beef arranges going-private transaction

2022-09-12 13:29 ET - News Release

Mr. James Leung reports

GINGER BEEF CORPORATION ANNOUNCES GOING PRIVATE TRANSACTION WITH ITS PRINCIPAL SHAREHOLDERS

Ginger Beef Corp. has entered into an amalgamation agreement with Leung & Son Holdings Inc. (Newco) pursuant to which the company will be taken private by way of an amalgamation between Newco and the company.

Newco is a corporation owned by Stanley Leung, 360181 Alberta Ltd., Leung Enterprises Ltd., Kahcheng Chua, James Leung, Debra Leung and Burger Burger Ltd. (the "Acquirors"). The Acquirors collectively own approximately 9,782,669 common shares or 73.21% of the issued and outstanding common shares (the "Shares") in the capital of the Company. An RRSP which is owned by James Leung and which owns 493,000 Shares, is not an Acquiror. As at September 9, 2022, the Company had outstanding 13,361,997 Shares.

Pursuant to the Agreement, the Company will pay $0.25 per Share in cash (the "Offer Price") to holders of all of the issued and outstanding Shares that are not directly or indirectly, owned by the Acquirors. Each shareholder of the Company, other than Acquirors, will receive one redeemable preferred share of the amalgamated company for each Share held immediately prior to the Amalgamation. Each redeemable preferred share will then be redeemed for the Offer Price. The total cash consideration for the aggregate Offer Price will be $894,832. The Amalgamation, if consummated, will result in the Company being taken private and delisted from the TSX Venture Exchange.

The Amalgamation, if consummated, will constitute a "business combination" for the purposes of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101").

The board of directors of the Company (the "Board") formed a special committee (the "Special Committee") comprised of independent directors Moonkyu Lee and Chi Him Kan to evaluate the Amalgamation and make recommendations to the Board. The Special Committee has engaged DS Lawyers Canada LLP as its legal advisors.

The Company intends to seek approval from the majority of minority shareholders to comply with requirements of MI 61-101. Because the Company is listed on the TSX Venture Exchange, the Amalgamation will, pursuant to Section 4.4(1)(a) of MI 61-101, be exempt from the formal valuation requirements of MI 61-101.

The Special Committee retained Evans & Evans, Inc. as an independent valuator, who prepared a Comprehensive Valuation Report and Fairness Opinion dated September 9, 2022 (the "Report") with respect to the proposed Amalgamation. The Report concluded that the Offer Price was not fair from a financial point of view. The Special Committee, however, after considering both the Report and other factors relevant to the Amalgamation, resolved that the Board should:submit the Amalgamation to a vote of the shareholders at a shareholders' meeting and, in furtherance thereof, authorize the Company to enter into the Amalgamation Agreement; andmake no recommendation to the shareholders as to how they should vote in respect of the Amalgamation but advise shareholders they should take into account the considerations discussed by the Special Committee that will be in the information circular for the shareholders' meeting.

The Company has convened a special meeting of shareholders (the "Meeting") which will take place on November 7, 2022 for shareholders to consider and, if thought appropriate, to approve the Amalgamation.

The completion of the Amalgamation is subject to a number of conditions precedent that are customary to this type of transaction, including, but not limited to, the approval of at least two-thirds of the votes cast by holders of Shares at the Meeting, the approval by at least a simple majority of the votes cast by the shareholders other than the Acquirors, and the acceptance of the Amalgamation by the TSX Venture Exchange.

Assuming the satisfaction of all conditions, the proposed transaction is expected to close as soon as practicable following the Meeting. However, there can be no assurances that the Amalgamation, or any other transaction with the Acquirors, will be completed.

Details of the terms and conditions of the Amalgamation, together with the Report, will be included in a management information circular, which will be mailed to the shareholders as soon as practicable and will also be available for download at www.sedar.com.

No actions are required to be taken by shareholders at this stage. The Company will communicate with shareholders in due course with respect to the Amalgamation.

We seek Safe Harbor.