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VANCOUVER, Dec. 20 /CNW/ --
VANCOUVER, Dec. 20 /CNW/ - A&W Revenue Royalties Income Fund (the Fund)
(TSX symbol AW.UN) today announced the results of its previously
announced substantial issuer bid (the Offer) to purchase from
unitholders for cancellation 2,500,000 of its outstanding units (Units)
at a price of $20.00 per Unit. The Offer expired at 11:59 pm (Vancouver
time) on Friday, December 17, 2010.
Based on reports provided by the depositary, a total of 2,588,663 Units
were validly deposited and not withdrawn under the Offer. As the
aggregate number of Units deposited under the Offer exceeds 2,500,000
Units, a pro-rata factor will apply such that unitholders who deposited
Units will have approximately 96.6% of the Units they deposited
purchased.
The number of Units deposited to the Offer and the pro-rata factor may
be subject to adjustment should unitholders who delivered notices of
guaranteed delivery fail to deliver certificates for such Units within
the required time period or should there be any other Units invalidly
deposited. Units deposited but not purchased, including Units
invalidly deposited, will be returned as soon as practicable by the
depositary to the depositing unitholder.
Take-up and payment for the Units accepted for purchase will be made as
soon as practicable in accordance with the Offer.
The Units to be purchased under the Offer represent approximately 17% of
the Units outstanding on a fully diluted basis as at December 17,
2010. After giving effect to the purchase of the Units, approximately
8,254,373 Units, and securities exchangeable for a further 3,968,528
Units will remain outstanding. Of the Units to be purchased pursuant to
the Offer, approximately 2,414,373 will be purchased from A&W Food
Services of Canada Inc. (Food Services), resulting in Food Services'
interest in the Fund decreasing from approximately 43% of the Units on
a fully diluted basis to approximately 32%.
As a result of the purchase of the Units under the Offer, distributable
cash available for distributions to unitholders is expected to increase
by approximately 10.1 cents (8%) per Unit per annum. Therefore, subject
to completion of the purchase of Units under the Offer, the Trustees of
the Fund have approved an increase in monthly distributions to
unitholders to 11.7 cents per Unit per month, from the current rate of
10.6 cents per Unit per month. The new monthly distribution rate will
be effective January 1, 2011 and will be payable as and from February
28, 2011. A&W Trade Marks Inc. (Trade Marks) will pay dividends to Food
Services on its investment in Trade Marks at the same rate.
The full details of the Offer are described in the Fund's offer to
purchase and issuer bid circular dated November 12, 2010 as well as the
related letter of transmittal and notice of guaranteed delivery, copies
of which are available on SEDAR at www.sedar.com.
About A&W Revenue Royalties Income Fund
The Fund is a limited purpose trust established to invest in Trade
Marks, which through its interest in the A&W Trade Marks Limited
Partnership (the Partnership), owns the A&W trade-marks used in the A&W
quick service restaurant business in Canada. The A&W trade-marks
comprise some of the best-known brand names in the Canadian foodservice
industry. In return for licensing Food Services to use its trade-marks,
Trade Marks (through the Partnership) receives royalties equal to 3% of
the sales of A&W restaurants in the Royalty Pool. Food Services is the
second largest quick-service hamburger restaurant chain in Canada.
Operating coast-to-coast, A&W restaurants feature famous trade-marked
menu items such as The Burger Family, Chubby Chicken and A&W Root Beer.
The Royalty Pool is adjusted annually to reflect sales from new A&W
restaurants, net of the sales of any A&W restaurants that have
permanently closed. The limited partnership interest of Food Services
is increased each year to reflect the annual adjustment. Food Services'
limited partnership interest may be exchanged for additional shares of
Trade Marks which shares are exchangeable for Units.
Trade Marks' distributions to the Fund and to Food Services, and the
Fund's distributions to unitholders are based on top-line revenues of
the A&W restaurants in the Royalty Pool, less interest, general and
administrative expenses and current income taxes of Trade Marks, and
are thereby isolated from many of the factors that impact an operating
business.
Food Services today declared a dividend of $43.9 million on its common
shares payable to its shareholders on or before January 1, 2011.
Certain statements in this report may be forward-looking in nature.
Actual results may differ materially from those expressed or implied in
these forward-looking statements. The forward-looking statements are
based on assumptions that management considered reasonable at the time
they were prepared. These forward-looking statements are subject to a
number of risk factors, including general economic and business
conditions, unemployment, harmonization of sales taxes, financial and
political instability, changes in income tax laws or their application
to the Fund and other factors disclosed previously and from time to
time in the Fund's public filings Forward-looking information is
provided as of the date hereof and, except as required by law, we
assume no obligation to update or revise forward-looking information to
reflect new events or circumstances.
Additional information relating to the Fund is on SEDAR at www.sedar.com and on the Fund's website at www.awincomefund.ca.
To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/December2010/20/c6871.html
p align="justify"Don Leslie, Chief Financial Officer: (604) 988-2141 or a href="mailto:investorrelations@aw.ca" cr="true"investorrelations@aw.ca/a/p