Au­toCanada granted right to own GM Canada deal­er­ships

Stockwatch Daily - - CONSUMER GOODS - Mr. Christo­pher Bur­rows re­ports

AU­TOCANADA INC. has en­tered into two new agree­ments that will strengthen its relationship with GM Canada. The com­pany has ex­e­cuted a pub­lic com­pany master agree­ment (PCMA) with GM Canada that per­mits Au­toCanada’s di­rect own­er­ship and con­trol of GM Canada deal­er­ships. It has also reached an agree­ment with CanadaOne Auto Group, a com­pany con­trolled by the com­pany’s former chief ex­ec­u­tive of­fi­cer and founder, Patrick Pri­est­ner, that will see Au­toCanada as­sume con­trol of five of the nine GM Canada deal­er­ships where it held a ma­jor­ity eq­uity stake with no vot­ing rights, and CanadaOne Auto Group buy­ing Au­toCanada’s in­ter­est in four deal­er­ships.

Un­der the newly ne­go­ti­ated agree­ments, five deal­er­ships will be­come ma­jor­ity owned and con­trolled by Au­toCanada and the re­main­ing four by CanadaOne Auto Group (own­er­ship by en­tity post­clos­ing is pre­sented be­low). Un­der the terms of the PCMA, each gen­eral man­ager in an Au­toCanada/GM Canada deal­er­ship will be re­quired to own a mi­nor­ity eq­uity po­si­tion in their deal­er­ship.

(See ACQ Ta­ble 1 on page 33)

Au­toCanada will re­ceive a one-time net pay­ment of ap­prox­i­mately $23-mil­lion from CanadaOne Auto Group as part of the trans­ac­tion. The trans­ac­tion was re­viewed and ap­proved by an in­de­pen­dent com­mit­tee of the board of di­rec­tors of the com­pany and is ex­pected to close on Jan. 2, 2018, sub­ject to GM Canada’s fi­nal ap­proval of the trans­ac­tions.

We seek Safe Har­bor.

Gor­don Ron­ald Bare­foot, Den­nis Stephen Des­Rosiers, Ar­lene Dickinson, Barry L James, Maryann N Keller, Steven Joseph Landry, Michael Hugh Ross

(ACQ) Shares: 27,459,683

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.