Globe & Mail Fairfax Financial Holdings Ltd. has proposed to take Recipe Unlimited Corp.
increase
private in a deal that values the restaurant chain owner at $1.2-billion. Toronto-based Fairfax is already the controlling shareholder of Recipe, which owns restaurants including The Keg, Harvey’s and Swiss Chalet. The investment firm currently holds 45.8 per cent of the company’s shares and has offered $20.73 cash per share for most of the remainder; the Phelan family, which founded Recipe predecessor Cara, would continue to hold a stake in the private business through Cara Holdings Ltd. Cara currently holds nearly 22 per cent of the company’s shares.
The offer represents a 53.4-per-cent premium to Monday’s $13.51 closing price for Recipe’s shares, the company said in a statement Tuesday. A special committee of the Recipe Unlimited board of directors unanimously recommended moving forward with the deal, and the board plans to recommend that Recipe shareholders vote to approve it once a definitive agreement is negotiated, the statement said.
Recipe Unlimited, which owns roughly 20 fast-casual and fast food chains and a total of more than 1,200 restaurants, has recently benefitted from customers’ growing comfort with dining in restaurants. Last week the company reported a 55.4-per-cent increase in system sales in the second quarter. Like other restaurant owners, however, the company has been affected by significant inflation in food prices and by a tight labour market.
The company expects the deal to close in late 2022.