The Melrose Group Demands Hank Payments Management Facilitate Requisitioned Shareholder Meetings

The Melrose Group, a Florida-based LLC, has recently made headlines with its unsolicited insider bid for Hank Payments Corp. (TSX.V: HANK), an emerging North American leader in the Banking-as-a-Service (BaaS) market. The group has requisitioned shareholder meetings for both Hank Payments Corp. and UpTempo Inc., the latter being the largest owner of Hank Payments, to address concerns about management's refusal to provide correct information regarding share ownership and the provenance of shares. This article explores the background, implications, and potential consequences of the Melrose Group's requisition.

The Melrose Group's requisition is a direct response to the management's lack of transparency regarding share ownership, particularly at the UpTempo Inc. holding Corp level. The group alleges that UpTempo Inc. has never held a valid shareholder meeting, violating subsection 133(1) of the Canada Business Corporations Act (CBCA). This claim is supported by the fact that no shareholder meeting has been held as required by the CBCA, rendering the board's authority questionable. Consequently, any actions taken by the board, including transactions with Nobelium (now Hank Payments), could be called into question.

The Melrose Group's requisition challenges the validity of UpTempo Inc.'s shareholder meetings and board decisions, aiming to address this issue and ensure that shareholders have a say in the company's future. The group seeks exemptive relief from the Ontario Securities Commission (OSC) to extend and clarify its takeover bid, as it relies on correct share data for an accurate bid price and quantity.



If the OSC rules in favor of the Melrose Group's requisition, Hank Payments' management could face several consequences. Firstly, they may be forced to convene shareholder meetings, which could lead to a vote of no confidence or a change in board composition. This could result in a loss of control for the current management. Secondly, the OSC might order the cancellation of shares issued without proper consideration, potentially diluting the ownership of existing shareholders. Lastly, the OSC could reverse share conversions, further impacting the company's capital structure. These actions could lead to a significant shift in power dynamics within Hank Payments, with potential implications for the company's strategic direction and shareholder value.



The Melrose Group's requisition for shareholder meetings could significantly impact the ongoing takeover bid and Hank Payments Corp.'s future. By requesting these meetings, the Melrose Group aims to address management's refusal to provide accurate information on share ownership, particularly at the UpTempo Inc. holding Corp level. This lack of transparency could hinder the Melrose Group's unsolicited insider bid, as it relies on correct share data for an accurate bid price and quantity. If the OSC grants exemptive relief, the Melrose Group could extend and clarify its bid, potentially leading to a successful takeover. However, if management continues to withhold information, it could delay or even derail the takeover bid, affecting Hank Payments Corp.'s future direction and shareholder value.

In conclusion, the Melrose Group's requisition for shareholder meetings is a critical development in the ongoing takeover bid for Hank Payments Corp. The group's allegations of management's lack of transparency and the potential consequences of the OSC's ruling highlight the importance of shareholder engagement and corporate governance in the modern business landscape. As the situation unfolds, investors and stakeholders alike will be watching closely to see how the OSC's intervention and the requisitioned meetings shape the future of Hank Payments Corp.