MISSISSAUGA, Ont. — Morguard Corporation and Temple Hotels Inc. have entered into a definitive agreement pursuant to which Morguard will acquire all outstanding common shares of Temple not currently owned by Morguard.
The transaction will be effected by way of a court-approved plan of arrangement under the Canada Business Corporations Act.
Under the arrangement, holders of Temple shares — excluding Morguard, which owns approximately 72.6 per cent of the total Temple shares — will receive cash consideration of $2.10 per Temple share from Morguard.
Morguard has entered into a support agreement with G2S2 Capital Inc. and Simé Armoyan (collectively, Armoyan), pursuant to which Armoyan has agreed to support and vote in favour of the transaction. Armoyan owns 12,714,834 Temple shares, representing approximately 16.9 per cent of the total shares issued and outstanding.
The arrangement must be approved by at least 66.66 per cent of the votes cast on a special resolution and a simple majority of the votes cast by shareholders, excluding Morguard and Chris J. Cahill, chairman of Temple and a director of Morguard.
The arrangement is subject to certain customary conditions, including among other conditions, approval by the Superior Court of Justice of Ontario (Commercial List) and applicable regulatory approvals, including the TSX.
Temple has agreed not to solicit any alternative transactions and to pay Morguard a termination fee equal to $1.25 million in certain specified circumstances. The transaction is set to close no later than March 31, 2020.