Fairfax dishes up $71-million offer for Prime Restaurants
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Hey there, time traveller!
This article was published 22/11/2011 (5091 days ago), so information in it may no longer be current.
MONTREAL — Fairfax Financial Holdings is looking to diversify its holdings by serving up a $71-million offer for the company that operates such eateries as East Side Mario’s, Casey’s and D’Arcy McGee’s.
The Toronto-based company is primarily an insurance holding company but occasionally invests in other industries.
It recently acquired prestige giftware store William Ashley and now wants to enter the restaurant business, said chairman and CEO Prem Watsa.
“Fairfax is looking to invest in strong, long-term businesses with iconic brands and experienced management,” Watsa said.
“Much like with the recent Fairfax acquisition of William Ashley, with Prime Restaurants we get strong brand names and decades of experience and knowledge with John Rothschild and Nick Perpick’s leadership.”
In addition to the experienced management team, Fairfax is said to see opportunities for Prime’s long-term growth, which also operates pubs Paddy Flaherty’s, Tir nan Og and Bier Markt.
As of Oct. 2, Prime had 138 franchised and 11 corporate restaurants in Canada and five franchised restaurants in the United States.
It earned $1.7 million on $13.3 million of revenues in its second quarter, down from $1.8 million on $12.2 million of revenues a year earlier.
Prime Restaurants Inc. (TSX:EAT) shares surged nearly 10 per cent Monday, gaining 69 cents at $7.62 in afternoon trading on the Toronto Stock Exchange.
The Toronto-based company said it solicited the offer from Fairfax under a provision of its agreement with Cara, which offered last month to pay $59 million for the company.
Cara said at the time of the Oct. 17 announcement Prime’s restaurants would fit into its own holdings, which include Swiss Chalet, Harvey’s, Milestones, Montana’s Cookhouse and Kelsey’s restaurants.
Under its agreement with Prime, Cara now has five business days to submit another bid or back away and receive a termination fee.
“Cara is examining the acquisition proposal from Fairfax and will evaluate Cara’s alternatives under the provisions of the acquisition agreement,” the company said Monday after receiving Prime’s notification.
Cara declined to provide additional comments about the potential for a revised bid now that Fairfax has stepped in.
Fairfax (TSX:FFH) is offering $7.75 per share for Prime, compared with Cara’s offer of $7 per share. Both offers include 25-cent per share special dividend.
Fairfax shares gained $3.52 at $424.99 in Monday trading.
— The Canadian Press