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STELLARTON, N.S. -- Sobeys, Inc. here and Empire Co., Ltd. have come to an agreement in which Empire will buy all of the outstanding common shares of Sobeys that it doesn't already own for CAN $58 per share (US $52), thereby taking the company private.
Empire now owns 72.1 percent of the issued and outstanding shares of Sobeys. The transaction values the shares Empire doesn't yet own at about CAN $1.06 billion (US $945 million).
The Sobeys board of directors unanimously accepted the recommendation from an independent committee of its directors, which was formed to evaluate such a transaction, the company said.
In making its recommendation, the committee considered, among other actors, the opinion of its independent valuator, RBC Capital Markets, which determined the fair market value of the Sobeys shares to be in the range of CAN $56 to CAN $64 (US $50 to US $57) per share.
"We believe that Empire's shareholders will be best served by 100 percent ownership of Sobeys," said Empire president and c.e.o. Paul D. Sobey. "Considering the very challenging Canadian retail landscape, this all-cash transaction represents an excellent opportunity for Sobeys' shareholders to realize a significant premium on their shares. For shareholders of Empire, the transaction will be immediately accretive."
If approved, the deal will proceed by way of a court-approved plan of arrangement under the Nova Scotia Companies Act. The Empire plan will be subject to customary conditions for approval of a plan of arrangement, including the favorable vote of a majority of Sobeys' shareholders other than Empire and related parties.
Sobeys has been a public company since 1998. It owns or franchises more than 1,300 stores in all 10 Canadian provinces under banners including Sobeys, IGA, Foodland, Price Chopper food stores, and Lawton's Drug Stores.
Empire was founded by Frank H. Sobey, son of the founder of Sobeys, Inc. Its main businesses include food retailing, real estate, and corporate investment activities. With about CAN $13.2 billion (US $11.8 billion) in annual revenue and CAN $5.1 billion (US $4.5 billion) in assets, Empire employs about 37,000 people directly and through its subsidiaries.