SunOpta Inc. (TSX: SOY; NASDAQ: STKL), a global company focused on organic, non-genetically modified and specialty foods, has agreed to waive a standstill provision to permit Oaktree Capital Management, L.P. to acquire additional common shares of SunOpta on or before May 6, 2020.
The maximum number that Oaktree may acquire is the lesser of 5,125,036 common shares or the number that would ensure that Oaktree’s beneficial ownership does not exceed 19.99% of the common shares currently outstanding on a partially-diluted basis at the time of such purchase, assuming the exchange of all shares of preferred stock held by Oaktree into common shares.
As of April 17, 2017, Oaktree controls 3,000,000 common shares (3.49% voting) and 11,333,333 special voting shares (11.64% voting).
On October 7, 2016, Oaktree Organics, L.P. and Oaktree Huntington Investment Fund II, L.P. subscribed for 85,000 shares of Preferred Stock of SunOpta for total consideration of US $85,000,000. Concurrently, SunOpta issued an aggregate of 11,333,333 special voting shares to the Oaktree funds.
Oaktree has previously requested that SunOpta waive a standstill provision that restricts Oaktree from acquiring additional securities of SunOpta. The board of directors established a process to have the disinterested directors of the board of directors consider the request and negotiate its terms since Oaktree is a related party of SunOpta and has two nominees on the board of directors.
As a condition to SunOpta’s consent, Oaktree has agreed to make such acquisitions only through open market purchases on the NASDAQ and TSX within the next three years. In addition, Oaktree has agreed to an amendment to the voting trust agreement entered into in connection with the issuance of the Preferred Stock, which preserves SunOpta’s ability to pay dividends in-kind on the Preferred Stock without triggering SunOpta’s shareholder rights plan.