RBD - Restaurant Brands

[Snoopy]

Yes, this is the bit I am not so sure about, reading the document. If they get less than 75% I'm not convinced that "shareholders who offered their shares to the Mexicans would get $9.45 for all of their shares" - the oferror can perhaps only purchase a total of 50.01 at their discretion. Because it states in the document that if 75% is achieved then those who offered 75% of their own shares will definitely have them all sold. But it is not so clear if the 75% is not met.

Weasel, let me preface my post by saying that I am not a corporate lawyer and not familiar with all the legal ins and outs of a "scheme of arrangement", such as being offered here. However, I do wish to remind everyone that the offer price is not $9.45, because that offer is only for a guaranteed 75% of the shares you own.

The day before the Mexican offer was tabled, the share price was $7.60. So if that is an assessment of 'fair value' in the absence of the offer, then the real offer price is:

($7.60+3x $9.45)/4 = $8.99

If, as you suggest, there is a 'get out' clause that enables the Mexicans to pull back and only get 50% of the shares then the real offer price is:

(2x$7.60+2x $9.45)/4 = $8.53

Thus those who accepted the original offer at an equivalent of $8.99 would suddenly lose 46c per share of the payout they were expecting. Furthermore to pull off this act of trickery, it would only require a single shareholder to not accept on behalf of the shares they own for the offerer to get 74.99% of the shares on issue not 75%, and use this shortfall to reprice the deal. Since it is almost certain that one shareholder at least will not accept the deal, that is tantamount to the original offer being a dishonest representation.

The Mexicans want 75% to gain control of decisions like potentially jettisoning a substantial part of the business in the future, a deal that could otherwise be blocked by minority shareholders. So there is a real reason to believe they really want 75% of shares, not 50.01%. Perhaps it will be clearer to you if you reread the offer and see that the Mexicans are after 75% of RBD shares in total, not 75% of your RBD shares.

SNOOPY