BFW SHARE BUYBACK FROM FRANCHISE BRANDS
BurgerFuel® Worldwide (BFW) has announced that it intends to proceed with an offer to buy back BFW shares currently held by Franchise Brands, LLC (FB), the company connected to Subway®.
In 2014, FB acquired a 10% stake in BFW through a subscription for new shares and the purchase of shares from Mason Roberts Holdings Ltd, the company’s largest shareholder. The price paid by Franchise Brands for that 10% holding at the time was NZD$1.35 per share.
In 2016, following the passing of Subway Founder Fred DeLuca, the collaboration agreement between BFW and FB ended, with FB retaining their 10% shareholding. It is now intended that FB will sell its 10% stake in BFW for US$1.5M (equating to around NZ$0.37 cents per share). BFW intends to proceed with an offer to purchase 5.27% of the 10% holding utilising cash reserves, and the balance of 4.73% is intended to be purchased by interests associated with BFW CEO Josef Roberts (via Mason Roberts Holdings Limited).
The offer will proceed, and the transaction will be completed following the 10 business day notice period from circulation to shareholders of a disclosure document relating to the transaction. To complete the transaction, BFW will cancel 3,143,355 shares thereby reducing the total number of shares in the company from 59,633,550 to 56,490,195.
BFW Chairman Peter Brook comments: “We are effectively reversing the deal that was done some years ago. We are appreciative to Franchise Brands for acknowledging the financial cost to BFW and the disappointment to all BFW shareholders in ending the partnership, by offering the shares back at a significantly reduced price”.
Peter Brook continues, “the board is comfortable with the level of shares being purchased by BFW and due to the cancellation of these shares, every BFW shareholder will benefit by gaining an increase in their proportionate equity holding, without the need to outlay cash”.
BFW is due to announce its financial results for FY18 by June 14th, 2018.