Sir Royalty Income Fund T.SRV.UN

Janes food becomes like activist investor

[jcw604]

Janes food, being an entity with a lot of money, when involved with the negotiation with the senior lenders, might be able to speed up the re-activation of income distribution to the unit-holders.

In the NR, they mentioned: 

The Offeror reiterates its willingness to work with the Independent Trustees and will seek to formally engage with the Independent Trustees shortly. Mr. Janes expects and hopes that the Independent Trustees will work with him, as the largest independent unitholder of the Fund, in the best interests of ALL unitholders.

Now, hopefully the trustee will find Janes food fair, reasonable and helpful in regarding to their negotiate with the senior lenders.

[logicandinertia]

Unfortunately, Janes will have nothing to do with negotiating with the senior lender.   The FUND has nothing to do with the actual running operation of the CORP, which is tightly held.  THe indepedent trustees are mandated to ensure that SIR CORP adheres to its agreement and represent minority shareholders, but have no role in the CORP.   The CORP quite rightly has

[Robsopinion]

Now you are quite right about the keg. A different example would be Prime restaurants (east side's, Casey's, pubs) that was structured exactly like SIR. Recipe (Cara) wanted to buy it/ merge it. So they had to buy out the royalty stream (the fund)  they wanted the whole thing. Sir may be in the same boat. An offer on the table that we don't know about but they need the fund

[jcw604]

For an investor with bigger appetite, they obviously want to wrap up the whole thing, the private company and the royalty fund, because as for RECIPE, I think their earning from KEG, will be significantly depleted by their obiligation to their Royalty fund and also more overhead to kept the trustee and other staff employed. It definitely will make more sense to wrap up the whole thing, if the cash

[jcw604]

Buying out the fund first make sense. SIR Corp will probably be out of any covenant breaches, since they receivie the 20% value of all the funds. Tbey will need to start paying distribution to the Royalty fund owner. That will give the buyer a much better negotiation position.

[jcw604]

I am assuming the same rules for stocks apply to a Royalty fund, but doesn't apply to SIR Corp which is a private company.