Leading foodservice group Cara Operations Ltd and specialty coffee company The Second Cup Ltd jointly announced today [Monday] that they have reached an agreement in respect of Cara’s offer to purchase all of the outstanding common shares of Second Cup.
The companies have agreed that Cara will increase its offer price to C$8.00 (US$4.94) in cash per common share and extend the expiry date of the offer until 9:00 pm on 5 February. Second Cup’s board of directors, following receipt of the recommendation of the Special Committee, will support the offer.
The increased price per share represents a premium of 33.3% to Second Cup’s closing market price of $6.00 on The Toronto Stock Exchange on Friday, 10 August last year, the last trading day prior to the announcement of the offer. All Second Cup shareholders who previously tendered to the offer will also receive the increased price.
Concurrently with reaching agreement with Second Cup, Cara has entered into a lock up agreement with Michael Bregman, Second Cup’s Chairman, and his family pursuant to which the Bregman family have irrevocably agreed to deposit all of their common shares to Cara’s C$8.00 offer.
The Bregman family owns 2,241,415 common shares of Second Cup representing approximately 23.9% of the outstanding common shares. The Bregman family’s obligation to tender to Cara’s C$8.00 offer does not extend to approximately 200,000 common shares of Second Cup which are subject to an option previously granted by the Bregman family.
Alton McEwen, Second Cup’s CEO, said: “We are pleased that a satisfactory resolution to the ownership issue has been achieved.
“Second Cup’s franchisees and employees have done an outstanding job of staying focused on their business and on serving their customers; a focus that has resulted in Second Cup reporting one of its strongest Christmas seasons in years. The current strong performance of Second Cup can only be enhanced by the removal of the uncertainty regarding ownership.”
Cara’s CEO and President Gabe Tsampalieros, added: “This announcement heralds the beginning of a new phase in the evolution of Second Cup.
“We look forward with enthusiasm to working with Second Cup’s management team and all constituents to further enhance the value and further secure the future of Second Cup to the mutual benefit of all its stakeholders.”
Cara currently owns approximately 4.05 million shares of Second Cup, which represents approximately 43.3% of the outstanding common shares. Upon taking up the Bregman family’s common shares deposited under the Offer, Cara will own approximately 6.3 million common shares, which represents approximately 67.2% of the outstanding common shares of Second Cup.