Q: Reading TSX Money about the combination of A&W Royalties Income Fund and A&W Food Services, it says, "Each Fund unit to be exchanged for one share of the combined company or $37.00 in cash (subject to proration)." As I write the unit price of A&W Income Fund is $33.76 which is a long way from $37. Can you please explain what unit holders have to do in order to get the full $37?
Thank you as always for your expertise.
Thank you as always for your expertise.
5i Research Answer:
The offer allows a unitholder to choose to receive $37.00 in cash for each unit they hold, or they can choose to receive one common share in A&W Food Services NewCo. The slight caveat to this is that if the total cash elected by all unitholders exceeds or is less than $175.6M, the cash distribution will be prorated so that only ~32.5% of the outstanding units are purchased for cash at $37.00 per unit.
Further details on electing for the $37 cash option will be in the management information circular in connection with a special meeting of unitholders to be called to approve the Transaction.