BRAMPTON, ON, Feb. 25, 2020 /CNW/ - (TSX: L; TSX: WN) – Loblaw Companies Limited (Loblaw) and George Weston Limited (GWL) jointly announce today that the Toronto Stock Exchange (TSX) has accepted an amendment to Loblaw's normal course issuer bid (NCIB). The amendment will permit GWL to sell common shares (Common Shares) of Loblaw in connection with Loblaw's NCIB in order for GWL to maintain its proportionate interest in Loblaw. GWL is the majority owner of Loblaw and holds approximately 52.2% of the issued and outstanding Common Shares.
"Following the acquisition of Shoppers Drug Mart in 2014, George Weston Limited's ownership interest was reduced to 46% of the issued and outstanding shares of Loblaw," said Galen G. Weston, Chairman and Chief Executive Officer of George Weston Limited. "At that time, we set a target to return to a majority ownership position in Loblaw, which we have achieved. The current plan is that we will accumulate approximately $2 billion of cash through participation in the Loblaw NCIB and cash generated from our other businesses. GWL is committed to its control position in Loblaw and stands by Loblaw's strategy."
The anticipated accumulation represents an incremental $1.3 billion to GWL's current cash position. The proceeds will provide GWL the opportunity to deploy capital across its portfolio of companies in retail, real estate and consumer goods to drive growth. GWL's participation assumes Loblaw will continue to deploy capital to its share buyback program and is subject to applicable regulatory approvals.
Loblaw's NCIB provides that Loblaw may, during the 12-month period from May 1, 2019 (Effective Date) to April 30, 2020, purchase up to 18,455,884 Common Shares, representing approximately 5% of the issued and outstanding Common Shares as at the Effective Date, by way of the NCIB on the TSX or through alternative trading systems or by such other means as may be permitted by the TSX or under applicable law. Based on the average daily trading volume of 590,406 during the six months preceding the Effective Date, daily purchases pursuant to the NCIB are limited to 147,601 Common Shares, other than block purchase exceptions and purchases from GWL. To date, an aggregate of 10,817,468 Common Shares have been purchased by Loblaw pursuant to the NCIB.
Loblaw will be permitted to purchase its Common Shares from GWL commencing on February 26, 2020, in accordance with an exemption granted by the TSX pursuant to its rules, regulations and policies in connection with the NCIB in order for GWL to maintain its proportionate percentage ownership. The maximum number of Common Shares that may be purchased pursuant to the NCIB will be reduced by the number of Common Shares purchased by Loblaw from GWL.
Purchases from GWL will be made during the TSX's Special Trading Session pursuant to an automatic disposition plan agreement (ADP Agreement) expected to be entered into between Loblaw's broker, Loblaw and GWL. Purchases from GWL will be made on trading days, as required by the ADP Agreement, that Loblaw makes a purchase from other shareholders. In the event that GWL does not sell Common Shares on any trading day as required by the terms of the ADP Agreement (other than as a result of a market disruption event), the TSX exemption will cease to apply and Loblaw will not be permitted to make any further purchases from GWL under the terms of the NCIB.
About George Weston Limited
George Weston Limited is a Canadian public company founded in 1882. The Company operates through its three reportable operating segments, Loblaw Companies Limited, Choice Properties Real Estate Investment Trust and Weston Foods. Loblaw provides Canadians with grocery, pharmacy, health and beauty, apparel, general merchandise, financial services and wireless mobile products and services. Choice Properties owns, manages and develops a high-quality portfolio of commercial retail, industrial, office and residential properties across Canada. The Weston Foods operating segment includes a leading North American bakery that offers packaged bread and rolls in Canada as well as frozen and artisan bread and rolls, cakes, donuts, pies, biscuits and alternatives throughout Canada and the U.S.
About Loblaw Companies Limited
Loblaw is Canada's food and pharmacy leader, and the nation's largest retailer. Loblaw provides Canadians with grocery, pharmacy, health and beauty, apparel, general merchandise, financial services and wireless mobile products and services. With more than 2,400 corporate, franchised and Associate-owned locations, Loblaw, its franchisees and Associate-owners employ approximately 200,000 full- and part-time employees, making it one of Canada's largest private sector employers.
Loblaw's purpose – Live Life Well® – puts first the needs and well-being of Canadians who make one billion transactions annually in the company's stores. Loblaw is positioned to meet and exceed those needs in many ways: convenient locations; more than 1,050 grocery stores that span the value spectrum from discount to specialty; full-service pharmacies at nearly 1,400 Shoppers Drug Mart® and Pharmaprix® locations and close to 500 Loblaw locations; PC Financial® services; affordable Joe Fresh® fashion and family apparel; and three of Canada's top-consumer brands in Life Brand, no name® and President's Choice.
SOURCE Loblaw Companies Limited