A&W REVENUE ROYALTIES INCOME FUND ANNOUNCES RESULTS OF SUBSTANTIAL ISSUER BID FOR ITS UNITS
December 20 2010 - 5:56PM
PR Newswire (Canada)
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not withdrawn under the Offer.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
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