BRAMPTON, ON, Sept. 3, 2015 /CNW/ - (Franchise Bancorp
Inc. - TSX Venture Exchange – FBI) - Edward
K. Loyst ("Loyst") and Paul
Thomson ("Thomson") announced that Aragorn Holdings Limited
("Aragorn") and WTF Holdings Limited ("WTF") have appointed a
chartered business valuator for the purpose of determining the fair
market value of shares in Franchise Bancorp Inc. ("FBI") owned by
Aragorn. That fair market value will determine the price at
which Aragorn sells those shares to WTF pursuant to the Put
Agreement (as defined below).
In September 2009, Aragorn
increased its ownership of Teraj International Inc. ("Teraj") from
50% to 100% and Teraj in turn sold 50% of its shares in FBI to WTF.
WTF is a company owned by Thomson, the President and a director of
FBI; James Walker, a director of FBI
and the President of Global Pet Food Stores Inc., a subsidiary of
FBI; and Dino Fragaglia, a director
of FBI and a Vice-President of Global Pet Food Stores Inc.
Following completion of these transactions, Teraj and WTF each
held an equal number of shares in FBI consisting of 2,161,275
(28.32%) common shares each, 65,461.5 (50%) Class A preference
shares each and 201,500.5 (31.67%) Class B preference shares each.
The preference shares are convertible into common shares on the
basis of three common shares for one preference share. If those
preference shares were to be converted into common shares, the
security holdings of each of Aragorn and WTF would consist of
2,962,161 common shares (being 38.48% of the common shares on a
partially diluted basis).
In connection with the 2009 transaction, WTF and Teraj entered
into a put agreement (the "Put Agreement") under which Teraj could
require WTF to purchase the shares then owned by Teraj (the "Put
Shares") for their fair market value at the time the Put Agreement
was exercised. Teraj was required to exercise the Put
Agreement no later than September 30,
2014.
On September 8, 2014, Aragorn
(which amalgamated with Teraj in 2013) exercised its right to
require the purchase of its shares in FBI under the Put
Agreement. Aragorn and WTF have attempted to agree on the
price and terms upon which WTF would purchase the Put Shares but
they have been unable to reach an agreement.
The Put Agreement calls for the business valuator to determine
the fair market value of the Put Shares within 30 days.
WTF anticipates making a bid for the remainder of the FBI shares
upon completion of its acquisition of the Put Shares; and if the
price at which WTF acquires the Put Shares is more than 115% of the
market price of the FBI Shares, securities laws will require that
WTF make a bid for the remainder of the FBI shares at no less than
such purchase price.
NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES
PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX
VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR
ACCURACY OF THIS RELEASE.
SOURCE Franchise Bancorp Inc.