VANCOUVER, Feb. 14, 2013 /CNW/ - A&W Food Services of Canada Inc. (A&W Food Services) announced today that it has sold 880,000 units of A&W Revenue Royalties Income Fund (TSX: AW.UN) (the Fund) at a price of $21.90 per unit. Following the sale of these units, A&W Food Services will own approximately 10.0% of the units of the Fund on a fully-diluted basis. A&W Food Services intends to continue to hold a minimum of a 10% indirect interest in the Fund to ensure that interests of Food Services are closely aligned with interests of unitholders of the Fund. The Fund did not receive any proceeds of the sale of units.
Prior to the sale of these units, A&W Food Services owned securities exchangeable for 2,228,854 units of the Fund, representing approximately a 16.5% indirect interest in the Fund. Following the exchange of securities for 880,000 units of the Fund and the sale of these units, A&W Food Services will own securities exchangeable for 1,348,854 units of the Fund, or approximately a 10.0% indirect interest in the Fund.
A&W Food Services intends to declare dividends in the amount of $17 million to its shareholders of record on February 22, 2013.
A&W Food Services is a privately held company and is Canada's second largest quick service hamburger restaurant chain with over 770 locations 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 Fund is a limited purpose trust established to acquire indirectly the A&W trade-marks used by A&W Food Services in its restaurant business in Canada. The trade-marks are licensed to A&W Food Services for which A&W Food Services pays the Fund royalties equal to 3% of the sales of A&W restaurants in the royalty pool.
The units were sold by way of a designated trade to a syndicate of underwriters led by TD Securities Inc. A&W Food Services disposed of ownership and control of the units to realize upon its investment. A&W Food Services will continue to acquire on a yearly basis additional securities indirectly exchangeable for units of the Fund to reflect the annual adjustment in respect of the royalty pool. The sale of the units was conducted through the Pure Trading exchange. The trade will settle on February 22, 2013.
Certain statements in this press release may contain forward-looking information within the meaning of applicable securities laws in Canada (forward-looking information). The words "anticipates", "believes", "budgets", "could", "estimates", "expects", "forecasts", "intends", "may", "might", "plans", "projects", "schedule", "should", "will", "would" and similar expressions are often intended to identify forward-looking information, although not all forward-looking information contains these identifying words. The forward-looking information is based on assumptions that management considered reasonable at the time it was prepared. The forward-looking information is subject to risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated by the forward-looking information.
SOURCE: A&W Food Services of Canada Inc.