HALIFAX, April 27, 2020 – Chorus Aviation Inc. (“Chorus”) announced today that it has entered into a shareholder rights plan (the “Rights Plan”) effective as of April 27, 2020.
The Rights Plan is designed to ensure that all Chorus shareholders are treated fairly in connection with any take-over bid and to protect against “creeping bids”, which involve the accumulation of more than 20%, on an aggregate basis, of the Chorus’ Class A Variable Voting Shares and Class B Voting Shares (collectively, the “Shares”) through purchases exempt from applicable take over-bid rules.
The Rights Plan is similar to plans recently adopted by other Canadian companies and approved by their shareholders, and has not been implemented in response to, or in anticipation of, any pending or threatened take-over bid.
“Since the onset of the COVID-19 pandemic, the price of Chorus’ shares have declined significantly,” said Joe Randell, President and Chief Executive Officer, Chorus. “We have taken significant steps to bolster our liquidity and remain focused on taking all actions necessary to emerge from this crisis as a strong company. We have adopted the Rights Plan to protect against those who may seek to take advantage of the current market environment to the detriment of Chorus and its shareholders.”
Pursuant to the Rights Plan, one right attaches to each issued and outstanding Share. Subject to the terms of the Rights Plan, the rights become exercisable in the event that any person (together with certain related parties) becomes a beneficial holder of 20% or more of the outstanding Shares without complying with the “Permitted Bid” provisions under the Rights Plan. In such event, holders of the rights (other than the acquiring person and its related parties) will be permitted to exercise their rights to purchase additional Shares at a 50% discount to the then prevailing market price of the Shares.
While the Rights Plan is effective as of April 27, 2020, it is subject to ratification by Chorus’ shareholders within six months of its adoption. Chorus will be seeking shareholder ratification of the Rights Plan at its upcoming annual and special meeting to be held on June 29, 2020. A summary of the principal terms of the Rights Plan will be included in the management proxy circular to be sent to shareholders in connection with such meeting and a complete copy of the Rights Plan is available under the Company’s profile on SEDAR at www.sedar.com. If the Rights Plan is not approved by the shareholders within six months of its adoption, it, together with the outstanding rights, will terminate and cease to be effective.