Sundial's Alcanna Acquisition Pushed To Early 2022, Pending Shareholders' Approval

It seems the previously announced plan of arrangement between liquor retailer Alcanna Inc. CLIQ LQSIF and Sundial Growers Inc. SNDL, Reddit's favorite marijuana company, will have to wait a little longer to get the green light from its shareholders.

The companies agreed to postpone the special meeting of Alcanna shareholders to consider, and if deemed advisable, to pass the special resolution to approve the proposed plan of arrangement with Sundial to Friday, Jan. 7. The meeting was initially scheduled for Tuesday, Dec. 14.

Alcanna said on Monday that its board of directors determined that the arrangement is in the best interest of the company and its shareholders after receiving a unanimous recommendation from a special committee comprised solely of independent directors of Alcanna and after careful consideration of various factors.

Only 56.29% of the Alcanna shareholders eligible to vote have voted as of the original deadline to vote by proxy of Dec. 10, 2021.

The current voting results show a lack of sufficient support to reach the necessary threshold of votes cast to consummate the arrangement.

Alcanna Acquisition

In October, Sundial revealed that it was acquiring all issued and outstanding common shares of Alcanna.

The deal, which was unanimously approved by the boards of directors of both companies,  entitles each of Alcanna's shareholders to receive 10.69 common shares of Sundial for each Alcanna common share held.

Alcanna currently operates 171 locations predominantly in Alberta under its three retail brands, Wine and Beyond, Liquor Depot and Ace Liquor.

Nova operates 62 stores across Alberta, Saskatchewan and Ontario, primarily under the Value Buds and Nova Cannabis banners.

The transaction is expected to deliver more than $15 million of additional EBITDA on an annual run-rate basis through synergies and other strategic initiatives.

Sundial recently reiterated its commitment to the proposed plan of arrangement with Alcanna and announced ISS' support for the plan.

Based on this fixed exchange ratio and closing price of Sundial shares on Dec. 7, 2021, the consideration represents a deemed value of approximately $8.08 per Alcanna share.

"Despite recent market volatility, we remain committed to our plan of arrangement with Alcanna," Sundial's CEO Zach George recently stated.

LQSIF Price Action

Alcanna's shares traded 1.39% lower at $5.32 per share at the time of writing on Monday morning.

SNDL Price Action

Sundial's shares traded 2.2883% lower at $0.5722 per share at the time of writing on Monday morning.

Photo: Courtesy of Ryoji Iwata on Unsplash