VAUGHAN, ON, Aug. 9, 2022 /CNW/ - Recipe Unlimited Corporation ("Recipe" or the "Company") (TSE: RECP) announced today that, based on the unanimous recommendation of a special committee of independent directors (the "Special Committee") of its board of directors (the "Board"), it has entered into a letter of intent with Hamblin Watsa Investment Counsel Ltd., investment manager on behalf of certain affiliates of Fairfax Financial Holdings Limited (collectively, "Fairfax"), in respect of a transaction (the "Proposed Transaction") whereby a newly-formed wholly-owned subsidiary (the "Purchaser") of the buying group comprised of certain affiliates of Fairfax (collectively, the "Buying Group") will acquire all of the multiple voting shares ("MVS") and subordinate voting shares ("SVS", and together with "MVS", the "Shares") in the capital of the Company, other than those Shares owned by Fairfax or its affiliates and a maximum of 4,000,000 MVS owned by Cara Holdings Limited ("CHL"), at a purchase price of $20.73 per Share (the "Offer Price"), payable in cash.

The Offer Price represents a 53.4% premium to the closing price on August 8, 2022, and a 59.2% and 58.1% premium to the 30- and 60-trading-day volume weighted average price, respectively, as of the end of trading on August 8, 2022.

The Board, having received the unanimous recommendation of the Special Committee, determined that pursuing the Proposed Transaction is in the best interests of the Company and subject to negotiating a definitive agreement, the Board intends to recommend that the Company's shareholders vote in favour of the Proposed Transaction at a special meeting of shareholders to be held to approve the Proposed Transaction.

In connection with its review of the Proposed Transaction, the Special Committee retained Greenhill & Co. Canada Ltd. ("Greenhill") to provide financial advice and prepare a formal valuation of the SVS (the "Formal Valuation") to be issued by the Company pursuant to the Proposed Transaction as required under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"). Greenhill concluded that, as of August 8, 2022, and subject to the assumptions, limitations and qualifications as set out in the Formal Valuation, that the fair market value of the SVS was in the range of $16.67 to $21.85 per SVS. Greenhill has also provided its opinion (the "Fairness Opinion") to the Special Committee that, as of August 8, 2022, and subject to the assumptions, limitations and qualifications contained therein, the consideration to be received by the holders of SVS (other than the Purchaser or its affiliates) pursuant to the Proposed Transaction is fair, from a financial point of view, to the holders of SVS (other than the Purchaser or its affiliates).

Transaction Details

Pursuant to the terms of the Proposed Transaction, the Purchaser will acquire all of the Shares, other than those Shares owned by Fairfax or its affiliates and a maximum of 4,000,000 MVS owned by CHL, for a purchase price of $20.73 per Share, payable in cash. The Buying Group is comprised of certain affiliates of Fairfax. The Proposed Transaction would be financed by equity proceeds contributed by members of the Buying Group and debt financing, and would not be subject to any financing condition. The consummation of the Proposed Transaction will be subject to conditions customary to transactions of this nature, including, among others, (i) the negotiation and execution of a definitive agreement concerning the Proposed Transaction; (ii) receipt by the Company and the Buying Group of any required regulatory, court and/or stock exchange approvals; and (iii) the approval of the Proposed Transaction at a special meeting of the shareholders of the Company entitled to vote on the Proposed Transaction (including a "majority of the minority" vote of the shareholders excluding for this purpose the votes of Shares held or controlled by persons described in items (a) through (d) of Section 8.1(2) of MI 61-101).

Recipe expects to hold a special meeting (the "Special Meeting") of Recipe's shareholders to approve the Proposed Transaction following execution of the definitive agreement. The Proposed Transaction is expected to close in the last quarter of 2022, subject to shareholder and regulatory approvals and other customary closing conditions. The terms and conditions of the Proposed Transaction will be disclosed in greater detail in a management information circular for the Special Meeting that is expected to be mailed to Recipe's shareholders following the execution of the definitive agreement for the Proposed Transaction. Copies of the definitive agreement and of the management information circular for the Special Meeting will be filed with Canadian securities regulators and will be available on the SEDAR profile of Recipe at www.sedar.com. Recipe's shareholders are urged to read those and other relevant materials when they become available.

There can be no assurance that Recipe and Buying Group will enter into a definitive agreement for the Proposed Transaction or that the Proposed Transaction will occur as proposed or at all.