Hexo Corp.’s Shareholders Approve Acquisition by Way of Arrangement With Tilray Brands, Inc.
June 14 2023 - 12:17PM
Business Wire
HEXO Corp. (TSX: HEXO; NASDAQ: HEXO) (“HEXO” or the
“Company”) announced today that at the special meeting of
its common shareholders held earlier today, its common shareholders
approved the previously announced arrangement agreement, as
amended, with Tilray Brands, Inc. (“Tilray”), whereby Tilray
will acquire, by way of court-approved plan of arrangement (the
“Arrangement”), all of the issued and outstanding common
shares of the Company (the “Common Shares”). Common
shareholders will receive 0.4352 of a share of Tilray common stock
(the “Tilray Shares”) for each whole Common Share held,
while holders of the recently issued non-voting Series 1 Preferred
Shares will receive a fraction or a number of Tilray Shares based
on the Preferred Share Exchange Ratio set out in the Company’s
press release issued on June 1, 2023.
The Arrangement required the approval of 66⅔% of votes cast by
the Company’s common shareholders and the approval of a simple
majority of the votes cast by minority common shareholders of the
Company. At the special meeting, the Arrangement was approved by
approximately 93.7% of all votes cast as well as by approximately
93.7% of the Common Shares voted by shareholders on the majority of
the minority vote required under Multilateral Instrument
61-101—Protection of Minority Security Holders in Special
Transactions.
Completion of the Arrangement remains subject to closing
conditions as set forth in the arrangement agreement, as amended,
including approval of the Ontario Superior Court of Justice
(Commercial List) (the “Court”). The Company anticipates
returning to the Court on June 19, 2023 to seek a final order of
the Court approving the Arrangement. Assuming that the conditions
to closing are satisfied or waived, it is currently expected that
the Arrangement will be completed by June 30, 2023.
About HEXO Corp.
HEXO is an award-winning licensed producer of premium products
for the global cannabis market. HEXO delivers a thoughtfully
curated portfolio of both recreational and therapeutic cannabis
products that inspire customer loyalty. HEXO’s brands include HEXO,
Redecan, Original Stash, Bake Sale and T 2.0, as well as medical
cannabis products.
HEXO’s world-class Canadian grow sites are unmatched in size,
technological advantage and yield of high-quality cannabis, driving
innovation through every step of the process. HEXO operates three
major grow sites in Ontario and Québec, including one of the
largest growth facilities in North America. HEXO Corp. is a
publicly traded company under the tickers (TSX: HEXO) and (NASDAQ:
HEXO).
Forward-Looking Statements
This press release contains forward-looking information and
forward-looking statements within the meaning of applicable
securities laws (“Forward-Looking Statements”).
Forward-Looking Statements relate to future events or future
performance, reflect current expectations or beliefs regarding
future events and are typically identified by words such as
“anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”,
“likely”, “may”, “plan”, “seek”, “should”, “will” and similar
expressions suggesting future outcomes or statements regarding an
outlook. These include, but are not limited to, statements with
respect to the Arrangement, including the expected timing of
closing and various steps to be completed in connection with the
Arrangement, statements with respect to the impact of the
Arrangement on the value of the Tilray Shares, and other statements
that are not historical facts.
Forward-Looking Statements are made based upon certain
assumptions and other important factors that, if untrue, could
cause the actual results, performance or achievements of the
Company to be materially different from future results, performance
or achievements expressed or implied by such statements. There can
be no assurance that such Forward-Looking Statements will prove to
be accurate. Such Forward-Looking Statements are based on numerous
assumptions, including assumptions regarding the ability to
complete the Arrangement on the contemplated terms, that the
conditions precedent to closing of the Arrangement can be
satisfied, and assumptions regarding present and future business
strategies, local and global economic conditions, and the
environment in which the Company operates.
Although the Company believes that the Forward-Looking
Statements in this news release are based on certain expectations
and assumptions that are current, reasonable and complete, these
statements are by their nature based on assumptions and involve
known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the
Company or Tilray to be materially different from any future
results, performance or achievements expressed or implied by the
Forward-Looking Statements. Forward-looking statements are subject
to a variety of risks, uncertainties and other factors which could
cause actual events or results to differ from those expressed or
implied by forward-looking statements, including, without
limitation: there can be no certainty that the Arrangement will be
completed and, if the Arrangement is not completed, the Company
will be confronted with immediate or near term default under the
Amended Senior Secured Note and there may be a significant decline
in the trading value of the Company Shares; Shareholders will
receive a fixed number of Tilray Shares which will not be adjusted
to reflect any change in the market value of the Tilray Shares or
Company Shares prior to the closing of the Arrangement; the Company
will incur costs even if the Arrangement is not completed and may
have to pay a company termination fee or a reimbursement fee to
Tilray; while the Arrangement is pending, the Company is restricted
from taking many actions; there can be no assurance that the
anticipated benefits of the Arrangement will be realized as
forecasted, including that the integration of Tilray and the
Company will occur as planned and/or that any potential synergies
will be achieved; the Company will not continue as a public company
and potential opportunity for growth will be eliminated; the
Arrangement may divert the attention of the Company’s management;
the Company’s business relationships may be subject to disruption
due to uncertainty associated with the Arrangement; Shareholders
interest in the Company’s business will be diluted; the business of
Tilray after completion of the Arrangement will be subject to the
risks currently affecting the businesses of Tilray and the Company;
certain third parties may have the right to terminate their
contracts, agreements or other arrangements with the Company as a
result of the change of control of the Company that would occur
upon completion of the Arrangement and therefore Tilray may not
have the full benefit of the rights and assets it is seeking to
acquire through its acquisition of the Company pursuant to the
Arrangement; and general business, economic, competitive,
political, regulatory and social uncertainties, including
uncertainty related to the cannabis markets.
Forward-Looking Statements should not be read as guarantees of
future performance or results. Readers are cautioned not to place
undue reliance on these Forward-Looking Statements, which speak
only as of the date of this press release. Events or circumstances
could cause the Company’s actual results to differ materially from
those estimated or projected and expressed in, or implied by, these
Forward-Looking Statements. Important factors that could cause
actual results to differ from these Forward-Looking Statements are
included in the “Risk Factors” section of the Company’s Annual
Information Form, as supplemented by the “Risks and Uncertainties”
section of the Company’s Management Discussion and Analysis for the
three and six months ended January 31, 2023 (“Q2 2023
MD&A”).
Readers are further cautioned that the lists of factors
enumerated in the “Risk Factors” section of the Company’s Annual
Information Form and the “Risks and Uncertainties” section of the
Q2 2023 MD&A that may affect future results are not exhaustive.
Investors and others should carefully consider the foregoing
factors and other uncertainties and potential events and should not
rely on the Company’s Forward-Looking Statements to make decisions
with respect to the Company. The Company disclaims any intention or
obligation, except to the extent required by law, to update or
revise any Forward-Looking Statements as a result of new
information or future events, or for any other reason.
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version on businesswire.com: https://www.businesswire.com/news/home/20230614815978/en/
For media or investor inquiries: invest@hexo.com
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