HAMILTON, ON, Dec. 21, 2021 /CNW/ - Stelco Holdings Inc. (TSX:
STLC) ("Stelco" or the "Company") announced today its
intention to commence a substantial issuer bid (the "Offer")
pursuant to which the Company will offer to purchase up to
$250,000,000 in value of its
outstanding common shares (the "Shares") from holders of
Shares (the "Shareholders") for cash. As of December 20, 2021, there were
77,315,265 Shares issued and outstanding. The Offer would be
for approximately 10.4% of the total number of issued and
outstanding Shares if the purchase price is determined to be
$31.00 (which is the minimum price
per Share under the Offer) or approximately 8.7% of the total
number of issued and outstanding Shares if the purchase price is
determined to be $37.00 (which is the
maximum price per Share under the Offer).
The Offer will proceed by way of a "modified Dutch auction".
Holders of Shares wishing to tender to the Offer will be entitled
to do so pursuant to: (i) auction tenders in which they will
specify the number of Shares being tendered at a price of not less
than $31.00 and not more than
$37.00 per Share in increments of
$0.25 per Share, or (ii) purchase
price tenders in which they will not specify a price per Share, but
will rather agree to have a specified number of Shares purchased at
the purchase price to be determined by auction tenders.
The purchase price to be paid by the Company for each validly
deposited Share will be based on the number of Shares validly
deposited pursuant to auction tenders and purchase price tenders,
and the prices specified by Shareholders making auction tenders.
The purchase price will be the lowest price which enables the
Company to purchase the maximum number of Shares not exceeding an
aggregate of $250,000,000 in
value based on valid auction tenders and purchase price
tenders, determined in accordance with the terms of the Offer.
Shares deposited at or below the finally determined purchase price
will be purchased at such purchase price. Shares that are not taken
up in connection with the Offer, including Shares deposited
pursuant to auction tenders at prices above the purchase price,
will be returned to Shareholders that tendered to the Offer.
If the aggregate purchase price for Shares validly tendered
pursuant to auction tenders and purchase price tenders is greater
than the amount available for auction tenders and purchase price
tenders, the Company will purchase Shares from the holders of
Shares who made purchase price tenders or tendered at or below the
finally determined purchase price on a pro rata basis, except that
"odd lot" holders (holders of less than 100 Shares) will not be
subject to proration.
The Offer will commence on December
22, 2021 and expire at 11:59
p.m. (Eastern time) on January
26, 2022 (the "Expiration Time"), unless
withdrawn or extended. The Offer will not be conditional upon any
minimum number of Shares being tendered. The Offer will, however,
be subject to other conditions and the Company will reserve the
right, subject to applicable laws, to withdraw or amend the Offer,
if, at any time prior to the payment of deposited Shares, certain
events occur.
The closing price of the Shares on the TSX on December 20, 2021, the last full trading day
prior to the Company's announcement of its intention to make the
Offer, was $37.68.
The Board of Directors of the Company believes that the Offer is
a prudent use of the Company's financial resources given the
Company's business profile and assets, the current market price of
the Shares and the Company's ongoing cash requirements. The Board
of Directors of the Company also believes the Offer will provide
Shareholders with the option to access liquidity with respect to
their Shares that may not otherwise be available on the TSX. The
Offer provides Stelco with the opportunity to return up to
$250,000,000 of capital to
Shareholders who elect to tender while at the same time increasing
the proportionate share ownership of Shareholders who elect not to
tender.
Details of the Offer, including instructions for tendering
Shares to the Offer and the factors considered by the Board of
Directors in making its decision to approve the Offer, will be
included in the formal offer to purchase and issuer bid circular
and other related documents (the "Offer Documents"),
which are expected to be mailed to Shareholders, filed with
applicable Canadian Securities Administrators and made available
free of charge on or about December 22, 2021 on SEDAR at
www.sedar.com. Shareholders should carefully read the Offer
Documents prior to making a decision with respect to the Offer.
The Board of Directors of the Company has obtained a liquidity
opinion from BMO Nesbitt Burns Inc. ("BMO Capital Markets")
to the effect that, based on and subject to the qualifications,
assumptions and limitations stated in such opinion, a liquid market
for the Shares exists as of December 20,
2021, and that it is reasonable to conclude that, following
the completion of the Offer in accordance with its terms, there
will be a market for the holders of Shares who do not tender to the
Offer that is not materially less liquid than the market that
existed at the time of the making of the Offer. A copy of the
opinion of BMO Capital Markets will be included in the Offer
Documents.
The Company has further engaged BMO Capital Markets to act as
its dealer manager in connection with the Offer. The Company has
also engaged Computershare Investor Services Inc.
("Computershare") to act as depositary for the Offer.
The Board of Directors of the Company has approved the Offer.
However, none of the Company, its Board of Directors, BMO Capital
Markets or Computershare makes any recommendation to any
Shareholder as to whether to deposit or refrain from depositing
Shares under the Offer. Shareholders are urged to evaluate
carefully all information in the Offer, consult their own
financial, legal, investment and tax advisors and make their own
decisions as to whether to deposit Shares under the Offer, and, if
so, how many Shares to deposit and at what price(s).
This press release is for informational purposes only and does
not constitute an offer to buy or the solicitation of an offer to
sell Shares. The solicitation and the offer to buy Shares will only
be made pursuant to the formal offer to purchase, the issuer bid
circular and other related documents.
Any questions or requests for information regarding the Offer
should be directed to Computershare, as the depositary, at:
corporateactions@computershare.com, or BMO Capital Markets, as the
dealer manager, at: StelcoSIB@bmo.com.
About Stelco
Stelco is a low cost, integrated and independent steelmaker with
one of the newest and most technologically advanced integrated
steelmaking facilities in North
America. Stelco produces flat-rolled value-added steels,
including premium-quality coated, cold-rolled and hot-rolled sheet
products, as well as pig iron and metallurgical coke. With
first-rate gauge, crown, and shape control, as well as uniform
through-coil mechanical properties, our steel products are supplied
to customers in the construction, automotive, energy, appliance,
and pipe and tube industries across Canada and the
United States as well as to a variety of steel service
centres, which are distributors of steel products. At Stelco, we
understand the importance of our business reflecting the
communities we serve and are committed to diversity and inclusion
as a core part of our workplace culture, in part, through active
participation in the BlackNorth Initiative.
Forward-Looking Information
This press release contains "forward-looking information" within
the meaning of applicable Canadian securities laws. Forward-looking
information may relate to our future outlook and anticipated events
or results and may include information regarding our financial
position, business strategy, growth strategy, budgets, operations,
financial results, taxes, dividend policy, plans and objectives.
Particularly, information regarding our expectations of future
results, performance, achievements, prospects or opportunities is
forward-looking information. In some cases, forward-looking
information can be identified by the use of forward-looking
terminology such as "plans", "targets", "expects" or "does not
expect", "is expected", "an opportunity exists", "budget",
"scheduled", "estimates", "outlook", "forecasts", "projection",
"prospects", "strategy", "intends", "anticipates", "does not
anticipate", "believes", or variations of such words and phrases or
state that certain actions, events or results "may", "could",
"would", "might", "will", "will be taken", "occur" or "be
achieved". In addition, any statements that refer to expectations,
intentions, projections or other characterizations of future events
or circumstances contain forward-looking information. Statements
containing forward-looking information are not historical facts but
instead represent management's expectations, estimates and
projections regarding future events or circumstances. These
statements include, without limitation, statements regarding the
Company's intentions and expectations with respect to the Offer,
the terms and conditions of the Offer, the number and aggregate
dollar amount of Shares to be purchased for cancellation under the
Offer, the expected expiration date of the Offer and purchases
thereunder and the effects and benefits of purchases under the
Offer. Purchases made under the Offer are not guaranteed and may be
suspended at the discretion of the Board of Directors.
Undue reliance should not be placed on forward-looking
information. The forward-looking information in this press release
is based on our opinions, estimates and assumptions in light of our
experience and perception of historical trends, current conditions
and expected future developments, as well as other factors that we
currently believe are appropriate and reasonable in the
circumstances. Despite a careful process to prepare and review the
forward-looking information, there can be no assurance that the
underlying opinions, estimates and assumptions will prove to be
correct. Certain assumptions in respect of: the utilization of and
access to our production capacity; capital expenditures associated
with accessing such production capacity; the impact of COVID-19 on
our business and the broader market in which we operate; the
market's ability to recover from COVID-19; upgrades to our
facilities and equipment; our research and development activities
associated with advanced steel grades; our ability to source raw
materials and other inputs; our ability to supply to new customers
and markets; our ability to effectively manage costs; our ability
to attract and retain key personnel and skilled labour; our ability
to obtain and maintain existing financing on acceptable terms;
currency exchange and interest rates; the impact of competition;
changes in laws, rules, and regulations, including international
trade regulations; and growth in steel markets and industry trends
are material factors made in preparing the forward-looking
information and management's expectations contained in this press
release.
There can be no assurance that such information will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such information. Accordingly,
readers should not place undue reliance on forward looking
information, which speaks only as of the date made. The
forward-looking information contained in this press release
represents our expectations as of the date of this news release and
are subject to change after such date. Stelco disclaims any
intention or obligation or undertaking to update publicly or revise
any forward-looking statements, whether written or oral, whether as
a result of new information, future events or otherwise, except as
required by law.
SOURCE Stelco