CPE News (8/13/2021) – Stelco Holdings Inc. (TSX: STLC) has closed the repurchase of 11,398,024 common shares in the capital of the company from LG Bedrock Holdings LP at a price of $34.93 per purchased share for gross proceeds to LG Bedrock Holdings LP of approximately $398 million.
The purchased shares have been cancelled.
LG Bedrock Holdings LP’s general partner is LG Bedrock Holdings GP LLC, wholly owned by Lindsay Goldberg.
In May 2021, LG Bedrock Holdings sold 6,670,000 common shares at $33 per share by way of bought deal secondary offering for gross proceeds of $220 million. Prior to the secondary offering, Bedrock Industries Coöperatief U.A. held 34,172,315 common shares, representing 38.5% of the issued and outstanding common shares. Immediately following the commencement of the secondary offering, Bedrock Industries distribute in kind of all of its common shares, including shares sold in the secondary offering, indirectly to LG Bedrock Holdings LP and to Stelco Executive Chairman & CEO, Alan Kestenbaum.
Following the closing of the secondary offering, LG Bedrock Holdings LP owned 19,052,235 common shares, representing approximately 21.5% of the then issued and outstanding common shares. Kestenbaum beneficially controlled 11,601,651 common shares, representing approximately 13.1% of the then issued and outstanding common shares.
Following the buyback, LG Bedrock Holdings LP’s ownership is reduced from 19,052,235 common shares to 7,654,211 of the issued and outstanding common shares (representing a decrease from approximately 21.5% to approximately 9.9% of the issued and outstanding common shares after giving effect to the share repurchase transaction).
As result of the share purchase, Fairfax Financial Holdings Limited becomes the largest shareholder (12,994,000 common shares) increasing its ownership from 14.6% to 16.8%. Kestenbaum increases his shareholding from 13.1% to 15.0%.
In November 2018, Fairfax Financial Holdings acquired 12,200,000 common shares of Stelco by way of private secondary transaction from Bedrock Industries at $20.50 per share for $250.1 million.
As a result of LG Bedrock’s holdings decreasing to below 10% of the issued and outstanding common shares, LG Bedrock will cease to have any nomination rights or preemptive rights pursuant to the investor rights agreement between, among others, Stelco and LG Bedrock. However, each of LG Bedrock’s current representatives on the board of directors will continue to serve as directors of the company, subject to the board of directors’ ordinary course director assessment and succession processes.
photo credit: Stelco
News Release
Stelco Announces Closing of Buyback
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
HAMILTON, ONTARIO, August 13, 2021 – Stelco Holdings Inc. (“Stelco” or the “Company”) (TSX: STLC) announced today that the previously announced repurchase of 11,398,024 common shares in the capital of the Company (the “Purchased Shares”) from LG Bedrock Holdings LP at a price of $34.93 per Purchased Share for gross proceeds to LG Bedrock Holdings LP of approximately $398 million has closed and the Purchased Shares have been cancelled.
About Stelco
Stelco is a low cost, integrated and independent steelmaker with one of the newest and most technologically advanced integrated steelmaking facilities in North America. Stelco produces flat-rolled value-added steels, including premium-quality coated, cold-rolled and hot-rolled steel products. With first-rate gauge, crown, and shape control, as well as reliable uniformity of mechanical properties, our steel products are supplied to customers in the construction, automotive and energy industries across Canada and the United States as well as to a variety of steel services centres, which are regional distributors of steel products.
For Further Information
For investor enquiries: Paul D. Scherzer, Chief Financial Officer, (905) 577-4432, paul.scherzer@stelco.com
For media enquiries: Trevor Harris, Vice-President, Corporate Affairs, (905) 577-4447, trevor.harris@stelco.com