Sprott Inc. Press Releases
Central Fund of Canada Shareholders Urged to Vote "FOR" the Sprott Arrangement
Transaction expected to unlock over US$300 million in value for shareholders; Leading Independent Proxy Advisory Firms Recommend CFCL Shareholders Support the Transaction
TORONTO, ON--(Marketwired - November 20, 2017) - Sprott Inc. (TSX: SII) and Sprott Asset Management LP ("Sprott") today urged shareholders of Central Fund of Canada Limited (NYSE American: CEF) (NYSE MKT: CEF) (TSX: CEF.A) ("CFCL") to vote FOR the plan of arrangement (the "Arrangement") at the upcoming special meeting of CFCL shareholders. Pursuant to the arrangement, Sprott will acquire the common shares of CFCL and the right to administer and manage CFCL's assets, and move CFCL's class A shareholders to a new Sprott-managed Sprott Physical Gold and Silver Trust (the "Sprott Trust").
Institutional Shareholder Services Inc. and Glass, Lewis & Co., LLC, two leading proxy advisory firms relied on by institutional investors, pension funds and fiduciaries, have recommended that CFCL shareholders vote "FOR" the arrangement at the shareholder meeting on November 30, 2017. Please note that all votes must be received by 1:00 pm (Calgary Time) November 28, 2017.
Your vote is important no matter how many shares you own. For assistance with voting your shares, please call Innisfree M&A Incorporated at (877) 750-5837 toll-free in the United States and Canada.
Benefits of the Transaction
The Arrangement offers several benefits for CFCL shareholders, including the following:
- Shareholders will own through the Sprott Trust the same amount of gold and silver bullion as they currently do and will maintain the same exposure.
- With an improved redemption feature that includes the opportunity for redemptions at Net Asset Value ("NAV"), the Sprott Trust is expected to trade closer to its underlying value. The transaction is expected to unlock over US$300 million in value1 for Class A shareholders of CFCL.
- The Sprott Trust will consist of a single class of Units rather than the existing dual class share structure of CFCL. As a single class, all Unitholders will have the same rights and voting privileges.
- The transaction should result in a tax deferred rollover of the Class A shares when converted to Units.
- The current custodian of Central Fund's gold and silver bullion (Canadian Imperial Bank of Commerce) is entitled to bid for continued services with the potential for no increase in custodial fees for the bullion.
"The transaction with Sprott, recommended by the Central Fund Board of Directors and supported by the two leading proxy advisory services, represents a tremendous opportunity for all shareholders," said John Ciampaglia, CEO of Sprott Asset Management. "The new Sprott Physical Gold and Silver Trust will include best in class redemption features and is expected to unlock over US$300 million in value. In addition, shareholders will benefit from Sprott's global brand recognition and experienced management team."
On October 1, 2017, the Board of Directors of CFCL recommended that all shareholders vote FOR the Arrangement. Upon completion of the transaction, all CFCL Class A shares will be exchanged for units in a new Sprott Physical Gold and Silver Trust which will feature Sprott's industry-leading physical redemption feature.
Directors, senior executive officers and certain other shareholders of CFCL, who or which together hold or control an aggregate of approximately 85% of the issued and outstanding common shares and 0.04% of the issued and outstanding Class A shares, have entered into voting support agreements with Sprott Inc. and agreed to vote their common shares and Class A shares in favor of the Arrangement at the Central Fund Meeting. CFCL's largest shareholders have also expressed their support for the transaction.
Your vote is very important. Shareholders should vote FOR the Arrangement Resolution using the proxy or voting instruction form sent to them in advance of the voting deadline of November 28, 2017. The meeting of CFCL holders of Class A shares and common shares is to be held on November 30, 2017 at 1:00 p.m. (local time) in Calgary, Alberta. Please call Innisfree M&A Incorporated at (877) 750-5837 toll-free in the United States and Canada for assistance in voting your shares.
Shareholders of Central Fund and other interested persons who require further information relating to the special meeting and the Arrangement are referred to the Arrangement Agreement, the Notice of Meeting and the Circular, all of which are filed on SEDAR and EDGAR and available for viewing under Central Fund's profile at www.sedar.com and at www.sec.gov, respectively.
1 Based on the published NAV (US$13.40) and closing price on the NYSE American (US$12.20) for CFCL's class A shares on March 7, 2017, the last trading day prior to the date of Sprott's initial press release proposing a plan of arrangement involving CFCL, and an indicative discount to NAV based on the published NAV (US$9.99) and closing price on the NYSE Arca (US$9.96) for the units of Sprott Physical Gold Trust on March 7, 2017.
Sprott is an alternative asset manager and a global leader in precious metal and real asset investments. Through its subsidiaries in Canada, the US and Asia, the Corporation is dedicated to providing investors with best-in-class investment strategies that include Exchange-Listed Products, Alternative Asset Management and Private Resource Investments. The Corporation also operates Merchant Banking and Brokerage businesses in both Canada and the US. Sprott is based in Toronto with offices in New York, Carlsbad and Vancouver and its common shares are listed on the Toronto Stock Exchange under the symbol (TSX: SII). For more information, please visit www.sprott.com.
Managing Director, Investor Relations