TORONTO, Jan. 4, 2022 /CNW/ - Leon's Furniture Limited (TSX: LNF) ("LFL", or the "Company") announced today the final results of its "modified Dutch auction" substantial issuer bid to purchase (the "Offer") for cancellation up to $200,000,000 of its common shares (the "Common Shares") from holders of Common Shares ("Shareholders") for cash. The Offer expired at 5:00 p.m. (Eastern time) on December 30, 2021 (the "Expiration Date").

Based on the final count by the TSX Trust Company, as depositary (the "Depositary") for the Offer, the Company has taken up and paid for 7,999,993 Common Shares at a price of $25.00 per Common Share under the Offer, representing an aggregate purchase price of approximately $200,000,000 and approximately 10.4% of the total number of the Company's issued and outstanding Common Shares before giving effect to the Offer. All Common Shares purchased by the Company under the Offer will be cancelled by the Depositary. After giving effect to the Offer, LFL will have 68,793,903 Common Shares issued and outstanding.

An aggregate of 9,813,872 Common Shares were validly tendered and not withdrawn pursuant to auction tenders at or below the purchase price and purchase price tenders. Since the Offer was oversubscribed, Shareholders who made auction tenders at or below the purchase price and purchase price tenders had approximately 81.5% of their successfully tendered Common Shares purchased by LFL (other than "odd lot" tenders, which were not subject to proration).

The Company has made payment for the Common Shares tendered and accepted for purchase by tendering the aggregate purchase price to the Depositary, and payment to the Shareholders will be completed by the Depositary in accordance with the Offer and applicable laws. Payment for the Common Shares will be made in cash, without interest. Any Common Shares not purchased, including Common Shares not purchased as a result of proration, Common Shares tendered pursuant to auction tenders at prices higher than $25.00 per Common Share or Common Shares that were not validly tendered will be returned to the tendering Shareholder promptly by the Depositary. With the expiry of the Offer, the Company expects to recommence purchases under its normal course issuer bid pursuant to an automatic share purchase plan.

For Canadian federal income tax purposes, a deemed dividend arises on the repurchase of Common Shares under the Offer. To assist Shareholders in determining the Canadian income tax consequences of the Offer, LFL has determined that for purposes of the Income Tax Act (Canada) (the "Tax Act"), the paid-up capital per Common Share is estimated to be approximately $2.19 on the Expiration Date. Shareholders should review the Issuer Bid Circular dated November 17, 2021 for more information, including information about the tax treatment of deemed dividends (refer to Section 9, "Income Tax Considerations – Certain Canadian Federal Income Tax Considerations"). LFL designates the entire amount of the deemed dividend arising from its repurchase of the Common Shares under the Offer as an "eligible dividend" for purposes of the Tax Act and any corresponding provincial and territorial tax legislation.

The "specified amount" for the purposes of subsection 191(4) of the Tax Act in respect of each Common Share is $25.23.

The full details of the Offer are described in the offer to purchase and issuer bid circular dated November 17, 2021, as well as the related letter of transmittal and notice of guaranteed delivery, copies of which were filed and are available on SEDAR at www.sedar.com.

This press release is for informational purposes only and does not constitute an offer to buy or the solicitation of an offer to sell the Company's Common Shares.

Forward Looking Statements
This press release may contain forward-looking information within the meaning of applicable securities regulation. The words "may", "will", "would", "should", "could", "expects", "plans", "intends", "trends", "indications", "anticipates", "believes", "estimates", "predicts", "likely" or "potential" or the negative or other variations of these words or other comparable words or phrases, are intended to identify forward-looking statements. These statements include, without limitation, statements regarding the timing of payment and settlement for Common Shares purchased under the Offer. The Company believes the expectations reflected in the forward-looking statements in this press release are reasonable but no assurance can be given that these expectations will prove to be correct and such forward- looking statements should not be unduly relied upon. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties that may cause the results or events mentioned in this press release to differ materially from those that are discussed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, general, local economic, and business conditions. All forward-looking information in this press release speaks as of the date hereof. The Company does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise. Additional information about these assumptions and risks and uncertainties is disclosed in filings with securities regulators filed on SEDAR (www.sedar.com).

About Leon's Furniture Limited

LFL is the largest retailer of furniture, appliances and electronics in Canada. Our retail banners include: Leon's; The Brick; Brick Outlet; and The Brick Mattress Store. Finally, with The Brick's Midnorthern Appliance banner alongside with Leon's Appliance Canada banner, this makes the Company the country's largest commercial retailer of appliances to builders, developers, hotels and property management companies. The Company has 304 retail stores from coast to coast in Canada under various banners. The Company operates three websites: leons.ca, thebrick.com and furniture.ca.

SOURCE Leon's Furniture Limited

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