SMITH FALLS, ON, Nov. 2, 2018
/CNW/ - Canopy Growth Corporation (TSX: WEED) (NYSE: CGC) (the
"Company") today provided a Fundamental Change Notice, Notice of
Right to Convert, Notice of Make-Whole Fundamental Change and
Related Conversion Rate Adjustment, and Offer to Repurchase for
Cash (the "Notice") to holders of its C$600,000,000 aggregate principal amount of 4.25%
Convertible Senior Notes Due 2023 (the "Notes"), pursuant to the
Indenture, dated June 20, 2018, among
the Company, GLAS Trust Company LLC, as U.S. trustee and
Computershare Trust Company of Canada, as Canadian trustee (the
"Indenture"). Capitalized terms used herein and not otherwise
defined shall have the meanings set forth in the
Indenture.
Pursuant to the Subscription Agreement dated as of August 14, 2018, between the Company and CBG
Holdings LLC ("CBG"), on November 1,
2018, the Company issued 104,500,000 common shares (the
"Common Shares") and 139,745,453 common share purchase warrants
(the "Warrants") to CBG. CBG is an affiliate of Constellation
Brands, Inc. ("Constellation"), which, upon closing of the issuance
of the Common Shares and the Warrants (the "Investment"), is the
beneficial owner (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended) of approximately 56% of the
voting control over the Company's common shares. The closing
of the Investment constitutes a Fundamental Change under the terms
of the Indenture.
As a result of the Fundamental Change, the Company has commenced
a tender offer (the "Notes Tender Offer") to repurchase, at the
option of each holder, any and all of the Notes. Pursuant to
the terms of the Indenture, the Notes and the Notice, each holder
has the right (the "Fundamental Change Repurchase Right"), at the
option of each holder, to require the Company to repurchase all of
such holder's Notes, or any portion of the principal amount thereof
that is equal to C$1,000 or an
integral multiple of C$1,000, for
cash, on December 5, 2018 (the
"Fundamental Change Repurchase Date"). The repurchase price (the
"Fundamental Change Repurchase Price") to be paid by the Company
for Notes validly surrendered and not validly withdrawn will be
100% of the principal amount of the Notes, plus accrued and unpaid
interest thereon to, but excluding, the Fundamental Change
Repurchase Date. Holders may exercise their Fundamental Change
Repurchase Right by delivering notice (the "Fundamental Change
Repurchase Notice") through the transmittal procedures of The
Depository Trust Company ("DTC"), at any time prior to 5:00 p.m., New York
City time, on December 4, 2018
(the "Fundamental Change Expiration Time") and by delivering the
Notes described in the Fundamental Change Repurchase Notice through
the transmittal procedures of DTC. Any holder may withdraw its
submission of a Fundamental Change Repurchase Notice (in whole or
in part) by delivering a written notice of withdrawal through the
transmittal procedures of DTC at any time prior to the Fundamental
Change Expiration Time.
The Fundamental Change Repurchase Right is subject, in all
respects, to the terms and conditions of the Indenture, the Notes,
the Notice and any related notice materials, as amended and
supplemented from time to time.
In addition, the Indenture provides that, as a result of the
Investment and notwithstanding the Fundamental Change Repurchase
Right, the Notes became convertible, at the option of the holder,
beginning on September 18, 2018 and
are convertible at any time until 5:00
p.m., New York City time,
on December 5, 2018 (the "Conversion
Period"). In order to convert the Notes, a holder must deliver
the appropriate instruction form pursuant to DTC's book-entry
conversion program and transfer such Notes through the transmittal
procedures of DTC, prior to the end of the Conversion
Period. Holders may not convert any Notes with respect to
which a Fundamental Change Repurchase Notice has already been
delivered unless such Fundamental Change Repurchase Notice is
validly withdrawn. Notes properly surrendered for conversion may
not be withdrawn.
Pursuant to the terms of the Indenture, the closing of the
Investment also constitutes a Make-Whole Fundamental
Change. As a result, the Company's conversion obligation with
respect to Notes that are converted from and including the date on
which the Make-Whole Fundamental Change occurred, November 1, 2018, until 5:00 p.m., New York
City time, on December 4, 2018
(the "Make-Whole Fundamental Change Period"), will be increased by
2.9846 additional common shares (the "Additional Shares"). The
initial conversion rate for the Notes is 20.7577 common shares per
C$1,000 principal amount of Notes and
the Additional Shares will be added to the initial conversion rate
such that conversion rate for the Notes will be 23.7423 common
shares per C$1,000 principal amount
of Notes validly surrendered for conversion during the Make-Whole
Fundamental Change Period. If holders convert Notes during the
Conversion Period but after the Make-Whole Fundamental Change
Period, the conversion rate for the Notes will not be increased by
the Additional Shares. The Company may elect to settle
conversions in cash, common shares or a combination of cash and
common shares. The right of holders to convert their Notes is
separate from the Fundamental Change Repurchase Right.
Conversion rights with respect to the Notes is subject, in all
respects, to the terms and conditions of the Indenture, the Notes,
the Notice and any related notice materials, as amended and
supplemented from time to time.
Holders should review the Notice carefully and consult with
their own financial and tax advisors. None of the Company, its
affiliates, or its or their respective boards of directors,
employees, advisors or representatives, or the trustees, the paying
agent or the conversion agent for the Notes, is making any
representation or recommendation to holders as to whether to tender
or refrain from tendering their Notes in the Notes Tender Offer or
to exercise their conversion rights (if at all).
The paying agent and conversion agent for the Notes is GLAS
Trust Company LLC, 3 Second Street, Suite 206, Jersey City, New Jersey 07311,
Attention: Corporate Trust Administration. The Notice
detailing the Fundamental Change Repurchase Right and the
conversion rights with respect to the Notes is being provided to
the holders through the facilities of DTC.
THIS PRESS RELEASE IS FOR INFORMATIONAL PURPOSES ONLY AND DOES
NOT CONSTITUTE AN OFFER TO BUY OR THE SOLICITATION OF AN OFFER TO
SELL THE NOTES. THE NOTES TENDER OFFER IS BEING MADE ONLY PURSUANT
TO A TENDER OFFER STATEMENT (INCLUDING THE OFFER TO REPURCHASE AND
RELATED MATERIALS) THAT THE COMPANY WILL FILE WITH THE SECURITIES
AND EXCHANGE COMMISSION (SEC) AND THEREAFTER DISTRIBUTE TO
NOTEHOLDERS. NOTEHOLDERS SHOULD READ CAREFULLY THE TENDER
OFFER STATEMENT (INCLUDING THE OFFER TO REPURCHASE AND RELATED
MATERIALS) BECAUSE IT CONTAINS IMPORTANT INFORMATION, INCLUDING THE
VARIOUS TERMS OF, AND CONDITIONS TO, THE NOTES TENDER OFFER.
AFTER THE COMPANY FILES THE TENDER OFFER STATEMENT (INCLUDING THE
OFFER TO REPURCHASE AND RELATED MATERIALS) WITH THE SEC,
NOTEHOLDERS MAY OBTAIN A FREE COPY OF THE TENDER OFFER STATEMENT
(INCLUDING THE OFFER TO REPURCHASE AND RELATED MATERIALS) AND OTHER
DOCUMENTS THAT THE COMPANY FILES WITH THE SEC AT THE WEBSITE
MAINTAINED BY THE SEC AT WWW.SEC.GOV OR BY CONTACTING THE COMPANY
AT (855) 558-9333. NOTEHOLDERS ARE URGED TO CAREFULLY READ THESE
MATERIALS PRIOR TO MAKING ANY DECISION WITH RESPECT TO THE NOTES
TENDER OFFER.
About Canopy Growth Corporation
Canopy Growth
Corporation, a corporation organized and existing under the Canada
Business Corporations Act, is a world-leading diversified cannabis
and hemp company, offering distinct brands and curated cannabis
varieties in dried, oil and Softgel capsule forms.
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SOURCE Canopy Growth Corporation