August 2, 1996
Securities Commission Issues Decision on Clearly Canadian and Sun-Rype
Released: July 31, 1996 Contact: Ron Messent 660-4800 or (BC only) 1-800-373-6393
The British Columbia Securities Commission issued an oral decision today, following a hearing held yesterday, regarding the disclosure made in connection with Clearly Canadian Beverage Corporation's offer to acquire shares of Sun-Rype Products Ltd.
The Commission has ordered both Clearly Canadian and Sun-Rype to correct misleading statements each has made in relation to the offer.
The Commission concluded that statements made in Sun-Rype's directors' circular of July 17, 1996, and news release of July 18, 1996, were misleading and misrepresented:
· the listing of Sun-Rype shares on the Toronto Stock Exchange, and
· the present value of Sun-Rype shares and the future value of Sun-Rype once a listing on the TSE had been obtained.
The Commission ordered Sun-Rype to immediately prepare and disseminate a press release satisfactory to the Commission correcting the misleading statements.
The Commission also concluded that certain statements made by Clearly Canadian in a letter of July 24, 1996, to Sun-Rype shareholders were misleading and misrepresented the terms of the offer:
· by suggesting that all Sun-Rype B shares tendered to the offer will be taken up and that no shareholder who tenders to the bid will be left in a minority position;
· by representing that all Sun-Rype B shares issuable under current employee share purchase plans will be honoured;
· by suggesting that there was an "all cash option" available to shareholders who had concerns about the underlying value of Clearly Canadian's shares that were offered as consideration; and
· by suggesting that Clearly Canadian would be legally committed to buy apples from Okanagan growers first.
The Commission ordered Clearly Canadian to immediately prepare and send further disclosure to Sun-Rype shareholders, along with a news release satisfactory to Commission staff, correcting the misleading statements.
The Commission also ordered that, if it is Clearly Canadian's present intention to change the terms of the offer as disclosed in its circular of July 8, 1996, Clearly Canadian must amend its circular and any accompanying disclosure describing the offer must be clear and not misrepresent the terms or nature of the offer.
The British Columbia Securities Commission is a provincial government agency responsible for regulating trading in securities and exchange contracts.