Reuters — Recipe Unlimited Corp. said on Tuesday shareholder and investment firm Fairfax Financial Holdings has proposed to take the Canadian restaurant operator private for $1.23 billion, sending its shares up nearly 50 per cent.
The offer price marks a premium of more than 53 per cent to Recipe’s last close. The shares have fallen 24 per cent this year on broader market weakness following monetary tightening by central banks across the world.
Buyout firms have doubled down on take-private dealmaking opportunities as lower valuations make it easier to lure businesses away from the stock market at bargain prices.
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These firms spent a record US$226.5 billion on such transactions around the world in the first half of 2022, up 39 per cent from the same period last year, Dealogic data shows.
Fairfax’s take-private transactions in recent years include its stake in a 2018 deal for Regina-based pulse crop processor AGT.
Up until last year Toronto-based Fairfax also held a stake in the Arctic Gateway Group consortium; up until 2018 it had been a majority owner in steakhouse chain The Keg, now part of the Recipe group.
Recipe said it had entered into a letter of intent with Fairfax, adding its board would recommend shareholders vote in favour of a takeover once the deal was finalized.
Founded in 1883, Vaughan, Ont.-based Recipe’s brands also include Swiss Chalet, Harvey’s, St-Hubert, Montana’s and New York Fries, among others.
As of June-end, the company had over 1,200 restaurants in Canada, the U.S., Saudi Arabia, India and the United Arab Emirates.
— Reporting for Reuters by Niket Nishant in Bangalore. Includes files from Glacier FarmMedia Network staff.
