Premier Diversified Holdings Inc. has withdrawn its bid to take over 51% of the shares of Russell Breweries Inc. (TSX-V:RB), the companies announced July 21.
The companies have entered into an agreement that will allow Premier to increase its stake in the company from 16.7% to 19.99%. In addition, Russell has agreed to add two Premier execs to its board – Premier president and CEO Sanjeev Parsad and Premier director Alnesh Mohan.
“We are pleased that this process has been resolved, and we are looking forward to moving on with carrying out our business plans, which include further advancing our profitability and continuing to explore the strategic options that we have been pursuing,” said Russell CEO and director Li Yu.
“We fully expect that our new board members will be able to add further expertise and guidance as we move forward to enhance shareholder value.”
Parsad said the new arrangement will enhance the value of both companies.
“As Russell's largest shareholder, it was in the best interests of both Premier and Russell, and their respective shareholders, to reach an amicable resolution,” he said.
“In our view, engaging in a lengthy and expensive battle was not in either party's best interests.”
The Vancouver holding company had announced June 26 that it intended to try to increase its stake in Russell from 16.7% to 51%.
The agreement announced July 21 prevents Premier from trying to increase its stake in the brewer any further for the next 16 months. Premier will also be unable to engage in any discussions or negotiations relating to acquiring any further securities or acquire control.
Trading of Russell shares has resumed after being halted June 25.
Russell is not the only Vancouver-area brewery that has been the target of a takeover bid by a private equities company. Darryll Frost, president of Surrey’s Central City Brewing, said he was approached three times last year.
- With files from Tyler Orton and Glen Korstrom
