VANCOUVER, BC, Oct. 2, 2024
/CNW/ - A&W Revenue Royalties Income Fund (TSX: AW.UN) (the
"Fund") is pleased to announce that Institutional Shareholder
Services Inc. ("ISS"), a leading independent proxy advisory firm,
has recommended that unitholders of the Fund vote FOR the
proposed strategic combination (the "Transaction") between the Fund
and A&W Food Services of Canada Inc. ("A&W Food Services")
to create a leading publicly traded growth-focused quick-service
restaurant ("QSR") franchisor ("A&W Food Services NewCo").
ISS cited the "compelling strategic rationale, premium, credible
valuation, and non-approval risk" as the basis for its
recommendation that unitholders vote in favour of the
Transaction.
"The endorsement from ISS is a testament to the strategic
benefits of the transaction," said Susan
Senecal, President and Chief Executive Officer of the Fund
and A&W Food Services. "We are confident that this combination
will deliver significant value to our unitholders and drive further
growth in the years to come."
The Board of Trustees of the Fund recommends that unitholders
vote FOR the Transaction in advance of the deadline of 10:00 a.m. (Vancouver Time) on October 7, 2024.
Unitholder Meeting
On September 3, 2024, the Fund
filed a management information circular (the "Circular") and
related meeting materials (collectively with the Circular, the
"Meeting Materials") in connection with the Fund's special meeting
of unitholders (the "Meeting") scheduled to be held at Suite 300,
171 West Esplanade, North Vancouver,
British Columbia, V7M 3K9 on October
8, 2024 at 10:00 a.m.
(Vancouver Time). Unitholders have the option of listening to the
Meeting via teleconference at 1-437-781-4585 (Canada) or 1-617-675-4444 (United States), PIN 724 785 712 1793#.
Unitholders listening to the Meeting via teleconference will not be
permitted to vote, ask questions or otherwise participate at the
Meeting. The Meeting Materials are available on the SEDAR+ profile
of the Fund at www.sedarplus.ca and on the Fund's website at
https://awincomefund.ca/investors/special-meeting-2024. Unitholders
are encouraged to review the Meeting Materials prior to voting on
the Transaction.
Election Deadline
Under the terms of the Transaction, each unitholder can elect to
receive in exchange for each unit of the Fund:
- $37.00 in cash (representing a
premium of 30% to the closing trading price of the units on the
Toronto Stock Exchange of $28.54 on
July 19, 2024, the last trading day
prior to the public announcement of the Transaction) (the "Cash
Consideration");
- one common share (an "A&W Food Services NewCo Share") of
A&W Food Services NewCo (the "Share Consideration"); or
- a combination of 32.54277% of the Cash Consideration (being
$12.040825) and 67.45723% of the
Share Consideration (being 0.6745723 of an A&W Food Services
NewCo Share).
The elections of unitholders to receive Cash Consideration or
Share Consideration will be subject to proration in the event that
unitholders elect, in the aggregate, to receive more or less than
$175.6 million in cash consideration,
such that in all cases, a total of 4,746,582 units will be
purchased for cash at $37.00 per
unit, representing approximately 32.5% of the outstanding units as
of July 19, 2024. Unitholders
electing Combination Consideration will not be subject to further
proration.
Unitholders are reminded that, in order to make a valid election
(a) as to the form of consideration they wish to receive under the
Transaction and, if applicable, (b) to be able to receive any
A&W Food Services NewCo Shares on a wholly or partially
tax-deferred basis for Canadian federal income tax purposes,
unitholders must sign and return the letter of transmittal and
election form and make a valid election thereunder and return it
with accompanying certificate(s) or direct registration
statements(s) representing their units to the depositary for the
Transaction prior to 5:00 p.m.
(Vancouver Time) on October 4, 2024
(the "Election Deadline"). Unitholders that hold their units
through an intermediary, such as a broker or investment dealer,
will not receive a letter of transmittal and election form and
should contact their intermediary for instructions and assistance
and carefully follow any instructions provided by such
intermediary. If a unitholder does not make proper election
prior to the Election Deadline, they will be deemed to have made an
election to receive the Share Consideration in respect of each unit
held, or, only to the extent of any deemed election to receive Cash
Consideration as a result of proration (as further described in the
Circular), the Cash Consideration, and will not be eligible to
receive any Share Consideration on a tax-deferred basis.
Unitholder Questions and Voting Assistance
For any questions or requests for voting assistance, please
contact the Fund's proxy solicitation agent, Laurel Hill Advisory
Group, by telephone at 1-877-452- 7184 (North American Toll Free)
or 1-416-304-0211 (Outside North America), or by email at
assistance@laurelhill.com.
About A&W Revenue Royalties Income Fund
A&W Revenue Royalties Income Fund is a limited purpose trust
established to invest in Trade Marks, which through its interest in
the A&W Trade Marks Limited Partnership (the "Partnership"),
owns the A&W trade-marks used in the A&W QSR business in
Canada. The A&W trade-marks
comprise some of the best-known brand names in the Canadian
foodservice industry. In return for licensing A&W Food Services
to use its trade-marks, Trade Marks (through the Partnership) is
entitled to royalties equal to 3% of the gross sales reported by
A&W restaurants in the Royalty Pool.
The Royalty Pool is adjusted annually to reflect gross sales
from new A&W restaurants added to the Royalty Pool, net of the
gross sales of any A&W restaurants in the Royalty Pool that
have permanently closed. Additional LP units are issued to A&W
Food Services to reflect the annual adjustment. A&W Food
Services' additional LP units are exchanged for additional common
shares of Trade Marks which are exchangeable for Trust Units. The
22nd annual adjustment to the Royalty Pool took place on
January 5, 2024 at which time the
number of restaurants in the Royalty Pool increased from 1,037 to
1,047.
Trade Marks' dividends to A&W Food Services and the Fund and
the Fund's distributions to unitholders are based on 3% of top-line
revenues of the A&W restaurants in the Royalty Pool, less cash
expenses including interest, general and administrative expenses
and current income taxes of Trade Marks.
About A&W Food Services
A&W is a leading QSR and the second largest burger chain in
Canada with a 68-year history of
service excellence, menu innovation and value creation. Operating
coast-to-coast and serving over 197 million guests annually,
A&W restaurants feature famous trade-marked menu items such as
The Burger Family®, Chubby Chicken® and
A&W Root Beer®.
® trademark of A&W Trade Marks Limited Partnership, used
under license.
Forward-looking Information:
Certain statements in this press release contain forward-looking
information within the meaning of applicable securities laws in
Canada. The forward-looking
information in this press release includes, but is not limited to,
expectations regarding the Meeting and the expected benefits of the
Transaction, including, without limitation, expectations with
respect to A&W Food Services NewCo's potential for growth and
value creation. The words "expects", "plans", "will", and similar
expressions are often intended to identify forward-looking
information, although not all forward-looking information contains
these identifying words.
This forward-looking information is based on a number of
assumptions that, while considered reasonable as of the date such
statements are made, are subject to known and unknown risks,
uncertainties and other factors that may cause the actual results
to be materially different from those expressed or implied by such
forward-looking information. Such assumptions include, but are not
limited to: the Fund's ability to obtain unitholder approval, TSX
approval and court approval and consummate the Transaction on the
terms and conditions currently contemplated; and that A&W Food
Services NewCo will be successful in executing its business
strategies and pursuing its growth opportunities.
Inherent in forward-looking information are risks and
uncertainties beyond management's or the Fund's or A&W Food
Services' ability to predict or control that may cause actual
results, performance or achievements to be materially different
from any future results, performance or achievements expressed or
implied by the forward-looking information. The forward-looking
information in this press release is subject to, among others, the
specific risks and uncertainties relating to the Transaction and
the A&W Food Services NewCo Shares set out in the Circular
under "Risk Factors" and the risk factors relating to the
business of A&W Food Services NewCo set out in the Circular
under "Information Concerning A&W Food Services NewCo After
Giving Effect to the Transaction", in addition to the other
information contained, or incorporated by reference, in the
Circular. Readers are cautioned that the risk factors referred to
above are not exhaustive and additional risks and uncertainties,
including those currently unknown or considered immaterial to Fund
may also adversely effect the Transaction, the A&W Food
Services NewCo Shares or A&W Food Services NewCo following
completion of the Transaction. There can be no assurance that
forward-looking information contained in this press release will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on
forward-looking information.
The forward-looking information contained in this press release
is based on the beliefs of the Fund and A&W Food Services'
management as well as on assumptions which such management believes
to be reasonable based on information available at the date hereof
and is subject to change after such date. All forward-looking
information in this press release is qualified in its entirety by
this cautionary statement and, except as required by law, the Fund
and A&W Food Services undertake no obligation to revise or
update any forward-looking information as a result of new
information, future events or otherwise after the date hereof.
SOURCE A&W Revenue Royalties Income Fund