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by Stockwatch Business Reporter

Transcanna Holdings Inc. (TCAN) and Lifestyle Delivery Systems Inc. (LDS) have cancelled their proposed merger. Transcanna shareholders were disappointed the deal did not go through, and Transcanna dropped 38 cents to $2.24 on 276,200 shares. Still, Lifestyle Delivery shareholders were relieved at the cancellation, sending the stock up four cents to 30 cents on 897,900 shares. Lifestyle said that after it received a request from Transcanna to modify the terms of the merger, it determined the merger would no longer be in the best interest of the company. It did not say what terms Transcanna wanted to modify. The letter of intent was terminated by "mutual agreement."

Under the original terms of the deal, Transcanna would acquire Lifestyle for the higher of $51.66-million in Transcanna shares or one Transcanna share for every 10 Lifestyle shares held (which would have been 10.74 million Transcanna shares). Because the Transcanna stock has dropped from $4.10 to $2.62 (today's open), Transcanna probably did not expect the dilution to be so high.

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