Labatt Brewing Company Limited completed its acquisition of Lakeport Brewing Income Fund on March 29, 2007. Unitholders of Lakeport holding in the aggregate 6,578,080 units, representing approximately 91.43 per cent of Lakeport units on a fully diluted basis, tendered their units under Labatt's offer dated February 21, 2007 for all of the units of Lakeport. Labatt subsequently completed a compulsory acquisition of the remaining Lakeport units to become the sole unitholder of Lakeport. Consideration of $201.4 million, or $28 per unit, was paid to Lakeport unitholders.
On February 1, 2007, Labatt and Lakeport had jointly announced a supported offer by Labatt for all of Lakeport's units and told the Commissioner of Competition that it was important that the offer close at the earliest possible date. Labatt offered to put all of the acquired business into a “hold separate” for a period of time (initially 30, but later 60 days), if needed, to allow the Commissioner to complete her review and preserve remedy options while also permitting Lakeport unitholders to be paid for their units on a timely basis. A draft hold separate order in a form previously used by the Competition Tribunal was provided to the Commissioner, but she took the position that a hold separate arrangement was not appropriate and declined to discuss whether any form of hold separate arrangement might be acceptable. The parties filed long form merger notification materials under the Competition Act, and the statutory waiting period expired on March 26. The offer period ended on March 29. Shortly prior to this date, the Commissioner brought an application for an order under s. 100 of the Competition Act to prevent closing for a 30-day period to give her more time to review the transaction.
On March 28, 2007, the Tribunal dismissed an application by the Commissioner to delay closing of the acquisition of Lakeport by Labatt. This decision means that the Commissioner will not always have the maximum five month review period which guidelines state are needed to review “very complex” transactions. Instead, the Commissioner may be held to the much shorter timing of the waiting periods in the Competition Act, in more cases than many had previously thought.
Labatt was represented by an in-house legal team that was led by Susan Rabkin and included Karyn Sullivan, with external assistance from Blake, Cassels & Graydon LLP with a team that was led by Craig Thorburn and included David Shaw, Alfred Buggé, German Morales, Rich Turner and Gord McKenna (M&A), Neil Finkelstein, Brian Facey, Catherine Beagan Flood, Navin Joneja, Jason Gudofsky, Anne Glover, Micah Wood, Maurizio Romano, Gregory Sullivan and Tara Cochrane (competition) and Jeff Trossman (tax).
Lakeport was represented by Stikeman Elliott LLP, with a team that included Roderick Barrett, David Weinberger and Mike Burkett (corporate) and Shawn Neylan, Katherine Kay and Michael Kilby (competition).