Sir Royalty Income Fund SIRZF

Primary Symbol: T.SRV.UN

Consumer Cyclical Restaurants

SIR Royalty Income Fund (the Fund) holds investment in SIR Corp (SIR). The Funds' investment, SIR is engaged in the business of owning and operating full-service restaurants in Canada. SIR has concept restaurant brands, including Jack Astor’s Bar and Grill, Scaddabush Italian Kitchen & Bar, and Canyon Creek Chop House, signature restaurant brands, such as Reds Wine Tavern, Reds Midtown Tavern, Reds Square One, and The Loose Moose, which are used by SIR under a license agreement with SIR Royalty Limited Partnership (the Partnership. The Fund receives distribution income from its investment in the Partnership and interest income from the SIR Loan. The Fund indirectly participates in the revenues generated under the License and Royalty Agreement through its Investment in the Partnership.

TSX:SRV.UN - Post by User

Sir Royalty Income Fund > Nice Summary Here

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Comment by flamingogoldon Feb 03, 2021 2:48pm

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Post# 32460630

RE:RE:RE:Nice Summary Here

"It would make the initial offer very clearly opportunistic and reflect poorly on them"

Too late there's no saving face now, it's quite obvious they are trying to steal this from us

Fabozzi wrote:

lostcauses wrote:

Thanks Fabozzi for the link, nice write-up.

Which one do you think is the most likely to happen ?

1 - Maybe SIR goes bankrupt. This probably isn’t great for SRV unitholders, at the very least it is another undetermined amount of time without receiving distributions.

2 - Maybe SIR realizes it isn’t going to be able to steal SRV and raises its bid. SIR is the buyer who can bid the most – SIR eliminates half its debt, deferred interest and royalties, and future royalties by acquiring SRV – and can easily pay a lot more and still be laughing.

3 - Maybe this unnamed buyer decides to buy SIR outright, and SRV finds itself with a stronger operating partner.

4 - Maybe SIR is able to wait out a vaccine and things just carry on. This would also would likely lead to a rerating.

I think 2 or 4 are the most likely to happen.

Logically 2 makes the most sense. Perhaps the biggest impediment now is how much of a bump in price SIR would have to make in order to get something done.....It would make the initial offer very clearly opportunistic and reflect poorly on them in my opinion. I think 1 is unlikely as there is interest in the sector as longer-term focused investors look past the pandemic. Let's remember that SIR has indicated they received funding for their initial proposal so if it's 1) bank funding (which i think is unlikely) then that reduces the possiblity of bankruptcy as I'd presume funding would be available without the offer going through or 2) private equity type funding with equity upside that sees a very cheap asset and are confident of the longer-term outlook for SIR.