CANADA: Molson, Coors try to tempt doubters
Molson Inc. and Adolph Coors Co. today announced that, in connection with the previously announced merger of the two companies, they have agreed to include a special dividend to Molson shareholders as part of the transaction.
Pentland Securities (1981) Inc., a company owned by Eric H. Molson and Stephen T. Molson and controlled by Eric H. Molson, has agreed to forego any participation in the special dividend.
Both Molson Class A non-voting and Class B common shareholders, excluding Pentland, will receive C$3.26 per share, or a total of approximately C$381m (US$316m), payable as part of the plan of arrangement to Molson shareholders of record as of the last trading day immediately prior to the date of closing of the merger transaction.
Had Pentland not agreed to forego participation in the special dividend, the special dividend payable to all Class A and Class B shareholders would have been C$3.00 per share. This payment has been approved by both companies' boards of directors. The other terms of the proposed merger transaction will remain as previously announced.
"Pentland's agreement to forego participation in the special dividend demonstrates a firm conviction that the Molson Coors merger is in the best interests of Molson and will bring significant value to its shareholders," said Eric H. Molson, chairman of the board of Molson.
"Pentland is fully committed to the Molson Coors merger and no other transaction will be supported by Pentland" added Mr. Molson.
"Both Coors and Molson agree that the merger is the best alternative for both companies, and are confident that the merged company can create greater levels of sustained shareholder value," the two companies said in a statement. "Today's action provides immediate value to Molson shareholders while still enabling them to participate in the significant long-term upside of the combination."
Shareholder approval, which is required to complete the transaction, will be solicited by the companies by means of the definitive proxy statement upon completion of the SEC review process. Once the definitive proxy statement has been cleared by the SEC, it will be submitted to the Quebec Superior Court and then mailed to shareholders. Each company will then hold special shareholder meetings to approve the transaction. Assuming these approvals, and approval by the Quebec Superior Court, the companies expect to close the transaction later this year or early next year.
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