Lock-up to be Extended for up to Two Years on 77 Percent of
Tilray’s Total Shares Outstanding
Transaction Expected to be Tax-Efficient for Privateer
Stockholders
Tilray, Inc. (NASDAQ:TLRY), a global leader in cannabis
research, cultivation, production, and distribution, today
announced that it has signed a non-binding Letter of Intent (“LOI”)
with its largest stockholder Privateer Holdings, Inc. (“Privateer”)
for a transaction that will extend the lock-up on and provide for
the orderly release of the 75 million Tilray shares held by
Privateer to Privateer’s equity holders. These shares currently
represent 77 percent of Tilray’s total shares outstanding.
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Under the terms of the LOI, the parties will effect a downstream
merger of Privateer with and into a wholly-owned subsidiary of
Tilray, with the Tilray subsidiary surviving the merger, and the
issuance by Tilray to Privateer stockholders of newly issued and
registered shares of Tilray common stock in an aggregate amount
equal to the number of Tilray common shares currently held by
Privateer. All Tilray shares held by Privateer and all outstanding
Privateer common stock will be cancelled upon consummation of the
merger. Tilray was originally incubated and financed by Privateer
as one of its wholly-owned operating subsidiaries before closing a
Series A round of capital in February 2018 and then becoming the
first cannabis producer to complete an Initial Public Offering
(IPO) on a major U.S. stock exchange in July 2018. Earlier this
year, Privateer distributed its ownership of its three other
operating subsidiaries unrelated to Tilray directly to Privateer
stockholders, leaving no material assets in Privateer other than
the 75 million shares it currently holds in Tilray.
Pursuant to the terms of the proposed transaction, the shares of
Tilray stock distributed in the merger would be subject to a
lock-up allowing for the sale of such shares only under certain
circumstances over a two-year period. During the first year
following the closing of the merger, shares will be released only
pursuant to marketed offerings and/or block trades to institutional
investors or via stock sales to strategic investors, all of which
would be arranged at the sole discretion of Tilray. The remaining
shares will be subject to a staggered release over the course of
the second year following closing. In addition, Privateer has
agreed in the LOI to a lock-up on its Tilray shares during the
negotiating period for the definitive merger agreement.
Mark Castaneda, Chief Financial Officer of Tilray, said: “We
appreciate the long-term confidence that Privateer has in the
Tilray business and we look forward to having their investors as
part of our stockholder base. We believe this transaction will give
Tilray greater control and operating flexibility, while allowing us
to effectively manage our public float.”
Michael Blue, Managing Partner of Privateer, said: “We believe
this structure will maximize overall returns for our visionary
investors in a tax-efficient manner while giving Tilray the
operating flexibility it needs to continue to be a leader in the
rapidly emerging global cannabis industry.”
The LOI for the proposed transaction has been unanimously
approved by the Special Committee of Tilray’s Board of Directors
(comprised of independent directors) and by Privateer’s Board of
Directors. The LOI is a non-binding expression of intent. The
merger and the transactions contemplated in connection therewith
will be consummated only if the parties enter into definitive
agreements setting forth the final terms of the merger, the lock-up
and other related matters; such definitive documents are approved
by the Special Committee of Tilray’s Board of Directors and by
Privateer’s Board of Directors; and all conditions to closing set
forth in the definitive documents are met, including the approval
of the merger by the stockholders of Privateer and Tilray. Both
parties intend to complete the transaction as expeditiously as
possible.
About Tilray®
Tilray is a global pioneer in the research, cultivation,
production and distribution of cannabis and cannabinoids currently
serving tens of thousands of patients and consumers in twelve
countries spanning five continents.
About Privateer Holdings, Inc.
Privateer Holdings is the world’s first private equity firm to
invest exclusively in legal cannabis. The Privateer Holdings team
has raised $200 million to invest in cannabis brands. Learn more at
www.privateerholdings.com.
Forward Looking Statements
This press release contains “forward-looking statements” within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995 and “forward-looking information” within the meaning of
Canadian securities laws, or collectively, forward-looking
statements. Forward-looking statements in this press release may be
identified by the use of words such as, “may”, “would”, “could”,
“will”, “likely”, “expect”, “anticipate”, “believe, “intend”,
“plan”, “forecast”, “project”, “estimate”, “outlook” and other
similar expressions, including statements in respect to Tilray and
the consummation of the merger. Forward-looking statements are not
a guarantee of future performance and are based upon a number of
estimates and assumptions of management in light of management’s
experience and perception of trends, current conditions and
expected developments, as well as other factors that management
believes to be relevant and reasonable in the circumstances,
including assumptions in respect of current and future market
conditions, the current and future regulatory environment and
future approvals and permits. Actual results, performance or
achievement could differ materially from that expressed in, or
implied by, any forward-looking statements in this press release,
and, accordingly, you should not place undue reliance on any such
forward-looking statements and they are not guarantees of future
results. Please see the heading “Risk Factors” in Tilray’s Annual
Report on Form 10-Q, which was filed with the Securities and
Exchange Commission (“SEC”) and Canadian securities regulators on
May 15, 2019, assumptions, uncertainties and other factors that may
cause actual future results or anticipated events to differ
materially from those expressed or implied in any forward-looking
statements. Tilray does not undertake and specifically declines any
obligation to update any forward-looking statements that are
included herein, except in accordance with applicable securities
laws.
Important Merger Information and Additional
Information
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval. In connection with the proposed transaction,
Tilray will file relevant materials with the SEC. Tilray will file
a Registration Statement on Form S-4 that includes a proxy
statement of Tilray and which also constitutes a prospectus of
Tilray. Tilray and Privateer will mail the final proxy
statement/prospectus to the respective stockholders of Tilray and
Privateer. Investors are urged to read the proxy
statement/prospectus regarding the proposed transaction when it
becomes available, because it will contain important
information. The proxy statement/prospectus and other relevant
documents that have been or will be filed by Tilray with the SEC
are or will be available free of charge at the SEC’s website,
www.sec.gov, or by directing a request when such a filing is made
to Tilray Investor Relations at ICR, 685 Third Avenue, Second
Floor, New York, NY 10017, attention: Katie Turner.
Tilray and certain of its directors, executive officers and
other members of management and employees may be considered
participants in the solicitation of proxies in connection with the
proposed transaction. Information about the directors and
executive officers of Tilray is set forth in its definitive proxy
statement which was filed with the SEC on April 15, 2019 and can be
obtained free of charge from the sources listed above.
Investors may obtain additional information regarding the interests
of such participants by reading the proxy statement/prospectus
Tilray will file with the SEC when it becomes available.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190610005288/en/
TilrayMedia: Chrissy Roebuck, +1-833-206-8161,
news@tilray.comInvestors: Katie Turner, +1-646-277-1228,
Katie.turner@icrinc.com
Privateer HoldingsMedia: Zack Hutson,
Zack.Hutson@privateerholdings.comInvestors: Mary Ellen Fukuhara,
IR@privateerholdings.com
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