First Canadian Management to buy Lakeview Hotel

First Canadian Management Corp. agreed to acquire Lakeview Hotel Investment Corp.'s outstanding securities and assume the hotelier's outstanding debt by way of a plan of arrangement.

The transaction, which is set to close in late December, will be made through First Canadian's three newly formed companies, namely 13487407 Canada Inc., 13487369 Canada Inc. and 13487326 Canada Inc.

13487369 Canada will buy all of Lakeview's outstanding common shares for 2 cents per share in cash for about C$391.2 million and will pay Lakeview about C$15.0 million for the hotelier to pay and satisfy all amounts owed to its lending syndicate led by ATB Financial Inc. and to pay certain costs associated with the foregoing transaction.

13487326 Canada will acquire all of Lakeview's outstanding series C debentures and all of its series D debentures for C$74.03 per C$1,000 principal amount of the two series of debentures for a total price of about C$1.4 million and C$752,144.80, respectively. Any and all unpaid interest owing to the debenture holders will be settled and extinguished for no consideration.

Currently, Lakeview has 19,557,806 common shares outstanding, 18,326 series C debentures outstanding and 101,600 series D debentures outstanding.

Lakeview's board is recommending that shareholder and debenture holders vote for the transaction, which is subject to the satisfaction of certain closing conditions, including court approval of the arrangement and the approval of the arrangement by Lakeview shareholders, series C debenture holders and series D debenture holders.

Fillmore Riley LLP is legal adviser to Lakeview, and Colliers Hotels is its adviser, while De Grandpré Chait SENCRL/LLP is legal adviser to the buyers. Tw Advisory provided fairness opinion to the company's special committee and board. Thompson Dorfman Sweatman LLP is legal counsel to the special committee.