Stephen K Gunn, the chair of the Special Committee, commented, "Recipe has valued its relationship with Fairfax since Fairfax invested in the Company in 2013. The Transaction offers an attractive premium and immediate liquidity to our shareholders while providing the Company with additional flexibility to operate as a private company in the hands of a committed long-term owner."
The Transaction is to be effected by way of a court-approved plan of arrangement and is expected to close in the last quarter of 2022, subject to receipt of shareholder and court approvals and certain other customary closing conditions. Completion of the Transaction is not subject to any financing condition.
Unanimous Board Approval
The Board, having received the unanimous recommendation of the Special Committee, determined that pursuing the Transaction is in the best interests of the Company and the Board intends to recommend that the Company's shareholders vote in favour of the Transaction at a special meeting of the shareholders to be held to approve the Transaction.
Formal Valuation and Fairness Opinion
In connection with its review of the Transaction, the Special Committee retained
Transaction Details
Pursuant to the terms of the Arrangement Agreement, the Purchaser will acquire all of the Shares, other than those Shares owned by Fairfax and 9,398,729 MVS owned by CHL, for a purchase price of
The consummation of the Transaction will be subject to conditions customary to transactions of this nature, including, among others, (i) receipt by the Company and the Purchaser of court and/or stock exchange approvals; and (ii) the approval of the Transaction at a special meeting of the shareholders of the Company entitled to vote on the Transaction (including a "majority of the minority" vote of the Shareholders excluding for this purpose the votes of Shares owned or controlled by Fairfax, CHL and other persons whose votes are required to be excluded under MI 61-101).
Recipe expects to hold a special meeting (the "Special Meeting") of Recipe's shareholders to approve the Transaction on or around
Voting Support Agreements
CHL and the directors and certain officers of the Company have each entered into voting support agreements to vote their Shares in favour of the Transaction subject to certain customary exceptions.
Early Warning Information
Fairfax currently owns and controls, directly and in the investment portfolios of its insurance companies, 5,657,435 SVS and 21,314,747 MVS, representing approximately 22.3% of the SVS and approximately 62.6% of the MVS, immediately prior to the execution of the Arrangement Agreement. Following completion of the Transaction, Fairfax will beneficially own approximately 84% of the issued and outstanding Shares. An early warning report will be filed by Fairfax in accordance with applicable securities laws and will be available on SEDAR at www.sedar.com or may be obtained directly from Fairfax upon request at 416-367-4941 (Attention:
CHL currently owns 12,740,077 MVS, representing approximately 37.4% of the MVS and 21.7% of the Shares immediately prior to the execution of the Arrangement Agreement. Following completion of the Transaction, CHL will own approximately 16% of the Shares. An early warning report will be filed by CHL in accordance with applicable securities laws and will be available on SEDAR at www.sedar.com or may be obtained directly from CHL upon request from
Forward Looking Information
This press release contains "forward-looking information" as defined under applicable Canadian securities laws. This information includes, but is not limited to, statements concerning our objectives, our strategies to achieve those objectives, as well as statements made with respect to management's beliefs, plans, estimates, projections and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking information generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "should", "plans" or "continue", or similar expressions suggesting future outcomes or events. Such forward-looking information reflects management's current beliefs and is based on information currently available to management. The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement.
The forward-looking statements included in this press release, including statements regarding the Transaction, are not guarantees of future results and involve numerous risks and uncertainties that may cause actual results to differ materially from the potential results discussed in the forward-looking statements. In respect of the forward-looking statements and information concerning the Transaction, management has provided same based on reliance on certain assumptions it considers reasonable at this time including that any conditions precedent to the closing of the Transaction can be satisfied. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release.
Risks and uncertainties related to the Transaction include, but are not limited to: failure of Recipe and the Purchaser to obtain the required shareholder and court approvals for, or satisfy other closing conditions to effect, the Transaction; the risk that the Transaction may involve unexpected costs, liabilities or delays; the risk that, prior to or as a result of the completion of the Transaction, the business of Recipe may experience significant disruptions, including loss of clients or employees due to transaction related uncertainty, industry conditions or other factors; risks relating to employee retention; the risk that legal proceedings may be instituted against Recipe; and risks related to the diversion of management's attention from Recipe's ongoing business operations.
The forward-looking information contained in this press release is made as of the date of this press release, and should not be relied upon as representing Recipe's views as of any date subsequent to the date of this press release. Except as required by applicable law, Recipe management and the Board undertake no obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
About Recipe
Founded in 1883,
RECIPE's iconic brands have established the organization as a nationally recognized franchisor of choice. As at
About Fairfax Financial Holdings Limited
Fairfax Financial Holdings Limited is a holding company which, through its subsidiaries, is primarily engaged in property and casualty insurance and reinsurance and the associated investment management. For further information contact:
Advisors
Greenhill & Co.
SOURCE
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