Macro Mails Circular for Special Meeting of Securityholders, Announces Receipt of Interim Court Order for Plan of Arrangement

March 04, 2022 8:25 PM EST | Source: Macro Enterprises Inc.

  • The Cash Consideration (as defined below) of CAD $4.00 per Macro Common Share (as defined below) represents a significant premium of approximately 46% to the 20-day volume weighted average price of the Macro Common Shares on the TSXV (as defined below) as of February 11, 2022
  • Macro Shareholders (as defined below) and Macro Optionholders (as defined below) are encouraged to vote well in advance of the proxy deadline of March 31, 2022 at 10:00 a.m. (Vancouver time)
  • Macro Shareholders and Macro Optionholders who have questions or need assistance in voting should contact Laurel Hill Advisory Group by telephone at 1-877-452-7184 (North American Toll Free) or 1-416- 304-0211 (Outside North America), or by email at assistance@laurelhill.com

Fort St. John, British Columbia--(Newsfile Corp. - March 4, 2022) - MACRO ENTERPRISES INC. (TSXV: MCR) (the "Company" or "Macro") is pleased to announce the mailing of its management information circular (the "Circular") for the special meeting (the "Meeting") of Macro Shareholders and Macro Optionholders (collectively, "Macro Securityholders") to consider the previously announced plan of arrangement (the "Plan of Arrangement") under Division 5 Part 9 of the Business Corporations Act (British Columbia) (the "Arrangement") with 1325996 B.C. Ltd. ("AcquireCo"), an entity to be controlled by Frank Miles ("Miles"), and jointly owned by Miles, Jeff Redmond, and Kenneth Mastre, (the "Participating Shareholders"), pursuant to which AcquireCo will acquire all of the outstanding shares in the capital of the Company.

In connection with the Arrangement, holders ("Macro Common Shareholders") of common shares in the capital of Macro (the "Macro Common Shares"), other than the Participating Shareholders with respect to certain Macro Common Shares, will receive C$4.00 (less applicable withholdings) per Macro Common Share (the "Cash Consideration") for each Macro Common Share held, including those Macro Common Shares held by holders (the "Macro Preferred Shareholders" and together with the Macro Common Shareholders, the "Macro Shareholders") of Class A convertible preference shares in the capital of Macro (the "Macro Preferred Shares" and together with the Macro Common Shares, the "Macro Shares"), other than Miles, following conversion of the Macro Preferred Shares into Macro Common Shares in accordance with the Plan of Arrangement.. The Cash Consideration represents a premium of approximately 46% to the 20-day volume weighted average price of the Macro Common Shares on the TSX Venture Exchange (the "TSXV") as at February 11, 2022 (the last day the Macro Common Shares traded prior to the announcement of the Arrangement).

In connection with the Arrangement, the board of directors of Macro (the "Macro Board") formed a special committee of independent directors of Macro (the "Special Committee") to, among other things, evaluate and consider whether the Arrangement is in the best interests of Macro, including to consider the effects of the Arrangement on Macro Securityholders and other stakeholders of Macro, and to negotiate the terms and conditions of the Arrangement.

The Special Committee has unanimously recommended, and the Macro Board unanimously determined, upon the recommendation of the Special Committee and with the abstention of Miles, that the Arrangement is fair to Macro Securityholders (excluding the Participating Shareholders) and is in the best interests of Macro. The Macro Board, subject to abstention by Miles, unanimously recommends that Macro Securityholders (other than the Participating Shareholders) vote in favour of the Arrangement Resolution (as defined below).

REASONS TO SUPPORT THE ARRANGEMENT

Significant Premium to Market Value: The Cash Consideration represents a premium of approximately 46% to the 20-day volume weighted average price of the Macro Common Shares on the TSXV as of February 11, 2022, being the last trading day prior to the announcement of the Arrangement.

Certainty of Value and Immediate Liquidity: The Cash Consideration to be received by Macro Shareholders (excluding the Participating Shareholders but including Miles in respect of the Miles Common Shares (as defined in the Circular)), and the Option Consideration (as defined in the Circular) to be received by the holders ("Macro Optionholders") of stock options of Macro ("Macro Options") (excluding the Participating Incentiveholders (as defined in the Circular)), are payable entirely in cash and provide such Macro Shareholders and Macro Optionholders, as the case may be, with certainty of value and immediate liquidity and remove the investment risk associated with owning shares of a corporation that operates in a volatile and cyclical business and economic environment, as well as other risks that are beyond the control of the Company and its management.

Recommendation of the Independent Special Committee: The Arrangement was recommended by the Special Committee, a committee of the Macro Board composed of two directors who are considered to be independent in respect of the Arrangement, being Robert (Bob) L. Fedderly (Chair) and William McFetridge.

To assist in making its recommendation, the Special Committee engaged CIBC World Markets Inc. ("CIBC") and Deloitte LLP ("Deloitte"), as financial advisor and independent financial advisor and valuator, respectively, in connection with the Arrangement.

CIBC provided the Special Committee with: (a) a fairness opinion to the effect that, as of the date of such opinion and based upon and subject to the assumptions, limitations and qualifications set forth therein, the Cash Consideration to be received by the Macro Common Shareholders under the Arrangement is fair, from a financial point of view, to the Macro Common Shareholders (excluding the Participating Shareholders) (the "CIBC Common Share Fairness Opinion"); and (b) a fairness opinion to the effect that, as of the date of such opinion and based upon and subject to the assumptions, limitations and qualifications set forth therein, the Cash Consideration to be received by Macro Preferred Shareholders per Macro Common Share issued upon conversion of the Macro Preferred Shares into Macro Common Shares under the Arrangement is fair, from a financial point of view, to the Macro Preferred Shareholders (excluding the Participating Shareholders) (the "CIBC Preferred Share Fairness Opinion", and together with the CIBC Common Share Fairness Opinion, the "CIBC Fairness Opinions").

The Special Committee also engaged Deloitte to prepare an independent formal valuation of the Macro Common Shares (the "Valuation") in the manner prescribed by Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions, which valuation is in the range of $3.75 to $4.65 per Macro Common Share. In addition to the Valuation, Deloitte has provided the Special Committee with an independent fairness opinion (the "Deloitte Fairness Opinion", and together with the CIBC Fairness Opinions, the "Fairness Opinions") to the effect that, as of the date of such opinion and based upon and subject to the assumptions, limitations and qualifications set forth therein, the Cash Consideration to be received by Macro Common Shareholders and Macro Preferred Shareholders in respect of Macro Common Shares issued upon conversion of the Macro Preferred Shares into Macro Common Shares under the Arrangement is fair, from a financial point of view, to the Macro Shareholders (excluding the Participating Shareholders).

Copies of the Valuation and each of the Fairness Opinions, which in each case should be read carefully and in their entirety, along with other relevant background information related to the involvement of CIBC and Deloitte, have been included in the Circular.

Support Agreements: The Participating Shareholders and the Other Support Agreement Directors and Officers (as defined in the Circular), who hold Macro Common Shares, Macro Preferred Shares and/or Macro Options have entered into support agreements pursuant to which they have agreed, subject to the terms thereof, to vote the Macro Shares and Macro Options over which they exercise voting control in favour of the Arrangement. In the aggregate, parties holding or controlling approximately 31.8% of the total number of issued and outstanding Macro Shares, 32.0% of the total number of issued and outstanding Macro Shares and Macro Options, 31.9% of the Macro Common Shares and 97.3% Macro Preferred Shares, have agreed to vote in favour of the Arrangement Resolution.

Reasonable Likelihood of Completion: The Arrangement is not subject to a financing condition and is otherwise subject to a limited number of customary conditions. Further, based upon representations and warranties from AcquireCo, no regulatory issues are expected to arise in connection with the Arrangement so as to prevent or delay the consummation of the Arrangement. Should the Arrangement not be completed, in certain limited circumstances, the Participating Shareholders, in their capacity as the Guarantors (as defined in the Circular), have jointly and severally, irrevocably and unconditionally guaranteed the payment by AcquireCo to Macro of the Macro Enterprises Expense Reimbursement (as defined in the Circular).

Arrangement is Preferable to the Status Quo: In recent years, changes in the commercial landscape in which the Company operates, due in part to COVID-19, the fluctuation of oil and gas prices and the cancellation of a major pipeline project, have had an impact, directly and indirectly, on the Company's business. In addition, the pipeline industry has also faced uncertainty due to ongoing environmental, Indigenous and political matters in Canada, the United States and internationally.

VOTING AT THE MEETING

At the Meeting, Macro Securityholders will consider and, if deemed advisable, pass, with or without variation, a special resolution to approve the Arrangement (the "Arrangement Resolution"). The Meeting will be held on Monday, April 4, 2022 at 10:00 a.m. (Vancouver time) at the offices of Norton Rose Fulbright Canada LLP at 510 West Georgia Street, Suite 1800, Vancouver, British Columbia, V6B 0M3.

Macro has mailed the Circular, applicable form of proxy or voting instruction form and letter of transmittal, as applicable, for the Meeting to Macro Securityholders. These documents contain comprehensive information with respect to how registered and beneficial Macro Securityholders may vote in advance of the Meeting. A copy of the circular is also available on the Company's profile at www.sedar.com and on its website at http://www.macroindustries.ca. The record date for determining Macro Common Shareholders eligible to vote at the Meeting is February 23, 2022.

The deadline for Macro Securityholders to return their completed proxies or voting instruction forms is Thursday, March 31, 2022 at 10:00 a.m. (Vancouver time).

QUESTIONS AND VOTING ASSISTANCE

Macro Securityholders who have questions or need assistance in voting should contact Laurel Hill Advisory Group by telephone at 1-877-452-7184 (North American Toll Free) or 1-416- 304-0211 (Outside North America), or by email at assistance@laurelhill.com.

RECEIPT OF INTERIM COURT ORDER

The Company today also announce that on February 28, 2022 it was granted an interim order by the Supreme Court of British Columbia (the "Interim Order") regarding the Arrangement. The Interim Order authorizes Macro to proceed with various matters, including the holding of the Meeting to consider and vote on the proposed Arrangement.

Subject to the receipt of the requisite approval of the Macro Securityholders and the final approval of the Arrangement by the Supreme Court of British Columbia, and subject to the satisfaction or waiver of the other conditions to completion of the Arrangement, the Arrangement is expected to close on or about April 8, 2022.

About Macro Enterprises Inc.

Macro's core business is providing pipeline and facilities construction and maintenance services to major companies in the oil and gas industry in northeastern British Columbia and northwestern Alberta. The Company's corporate office is in Fort St. John, British Columbia. The Macro Common Shares are listed on the TSXV under the symbol "MCR". Information on the Company's principal operations can be found at www.macroindustries.ca.

Forward-Looking Statement Cautions:

This news release contains certain forward-looking information and forward-looking statements (collectively, "forward-looking statements"), as such terms are defined under applicable securities law, regarding the Company's business and operations. Forward-looking statements are statements that relate to future, not past, events. In this context, forward-looking statements often address expected future business and financial performance and often contain words such as "anticipate", "believe", "plan", "estimate", "expect", and "intend", or other similar expressions. Forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are beyond the Company's control, that could cause actual results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements (including execution risk, market risk, industry risk, market sentiment, the impact of general economic conditions and competition from other industry participants, as well as stock market volatility). In this news release, forward-looking statements relate to, among other things, information regarding: (a) the terms and conditions of the Arrangement; (b) satisfaction of the conditions precedent to the Arrangement, if at all; (c) timing and consummation of, the Arrangement, if at all (on the same terms and conditions or otherwise); (d) the reasons for supporting the Arrangement; (e) the anticipated benefits of the Arrangement, if any, to Macro Securityholders and other stakeholders of Macro (including economic, business, competitive and other benefits); (f) the likelihood of the Arrangement being completed within a reasonable period, if at all; (g) the commercial prospects of the pipeline industry; and (h) the Meeting. Readers are referred to the Company's public disclosure record, including the Circular which is available on SEDAR (www.sedar.com). While such forward-looking statements are expressed by the Company, as stated in this release, in good faith and believed by the Company to have a reasonable basis, they are subject to important risks and uncertainties including, without limitation, risks relating to stock exchange, court, regulatory and other approvals required in connection with the Arrangement, risks relating to the satisfaction or waiver of the conditions precedent to the Arrangement (if at all) and adverse changes in applicable laws or regulations, which in each case could cause actual results to differ materially from future results expressed, projected or implied by the forward-looking statements. As a result of these risks and uncertainties, the proposed transaction could be modified, restructured or not be completed, and the results or events predicted in these forward-looking statements may differ materially from actual results or events. These forward-looking statements are not guarantees of future performance, given that they involve risks and uncertainties. The Company is not affirming or adopting any statements made by any other person in respect of the proposed transaction and expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except in accordance with applicable securities or to comment on expectations of, or statements made by any other person in respect of the proposed transaction. Investors should not assume that any lack of update to a previously issued forward-looking statement constitutes a reaffirmation of that statement. Reliance on forward-looking statements is at investors' own risk. Although the Company believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed timeframes or at all. In addition, this news release contains future-oriented financial information and financial outlook, as such terms are defined under applicable securities laws. The future-oriented financial information and financial outlook contained herein are made solely based on information available to the Company as of the date hereof and are subject to the same assumptions, risk factors and other qualifications as all other forward-looking statements, and are presented solely for the purpose of conveying the current anticipated expectations of the Company and may not be appropriate for any other purposes. The forward-looking statements contained in this news release are made as of the date of this news release and, except as required by applicable laws and the policies of the TSXV, the Company disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement. Trading in the securities of the Company should be considered highly speculative. There can be no assurance that Company will be able to achieve all or any of its proposed objectives.

For further information please contact:

Frank Miles
President and C.E.O.
Phone: (250) 785-0033

Bob Fedderly
Special Committee
Phone: (250) 787-0398

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/115732

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