Fog Cutter Capital Group Inc. entered into an agreement to acquire the remaining 18.8% stake in FAT Brands Inc..
December 10, 2020
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Fog Cutter Capital Group Inc. (FCCG) entered into an agreement to acquire the remaining 18.8% stake in FAT Brands Inc. (NasdaqCM:FAT) (the Company) on December 10, 2020. In connection with the Fog Cutter combination, FAT Brands has declared a special stock dividend payable only to holders of its common stock other than Fog Cutter, consisting of 0.2319998077 shares of FAT Brands' 8.25% Series B Cumulative Preferred Stock (NASDAQ: FATBP) for each outstanding share of common stock held by such stockholders, with the value of any fractional shares to be paid in cash. Upon closing of the merger, the former stockholders of FCCG will become direct stockholders of the Company holding in the aggregate the same number of shares of Common Stock held by FCCG immediately prior to the merger, and will receive certain limited registration rights with respect to the shares received in the merger. As a result of the Merger, FCCG's wholly-owned subsidiaries, Homestyle Dining, LLC, Fog Cap Development LLC, Fog Cap Acceptance Inc. and BC Canyon LLC, will become indirect wholly-owned subsidiaries of the Company. The completion of the Merger is subject to customary closing conditions and Each party's obligation to consummate the transactions under the merger agreement is also subject to certain additional closing conditions, including (i) the accuracy of the other parties' representations and warranties contained in the Merger Agreement (subject to customary materiality qualifiers) and (ii) the other parties' compliance in all material respects with their respective covenants and agreements contained in the Merger Agreement.
The Board of Directors of the Company established a Special Committee of the Board comprised solely of independent directors to review and evaluate the potential for a transaction with FCCG. The parties intend that the Merger will be treated as a tax-free reorganization for federal income tax purposes to the stockholders of FCCG, except to the extent of any cash received in lieu of fractional shares. Benjamin Rikkers of Foley & Lardner LLP acted as legal advisor for Fog Cutter Capital. Allen Sussman of Loeb & Loeb LLP acted as legal advisor for FAT Brands.
FAT Brands Inc. is a global franchising company. The Company acquires, markets, and develops fast casual, quick-service, casual dining, and polished casual dining concepts around the world. It owns 18 restaurant brands: Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Fazoliâs, Twin Peaks, Smokey Bones, Great American Cookies, Hot Dog on a Stick, Buffaloâs Cafe & Express, Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, Native Grill & Wings, Yalla Mediterranean and Ponderosa and Bonanza Steakhouses, and franchises and owns over 2,300 units worldwide. Round Table Pizza is the franchisor of quick service restaurants located in California and the western United States. Hot Dog on a Stick is the franchisor of quick service restaurants located in regional malls in California and the western United States. Johnny Rockets is an international restaurant franchise. It also offers barbecue, ribs, seared steaks and operates in over 61 locations across 16 states.