Popeyes Louisiana Kitchen, Inc. (NASDAQ:PLKI) Files An 8-K Entry into a Material Definitive Agreement
Item1.01
| Entry into a Material Definitive Agreement. |
On February21, 2017, Popeyes Louisiana Kitchen, Inc., a Minnesota
corporation (theCompany), entered into a definitive Agreement and
Plan of Merger (theMerger Agreement) with Restaurant Brands
International Inc., a corporation existing under the laws of
Canada (Parent), Restaurant Brands Holdings Corporation, a
corporation existing under the laws of the Province of Ontario
(Intermediate Parent), and Orange, Inc., a Minnesota corporation
and an indirect subsidiary of Parent (Sub).
The Merger Agreement provides that, upon the terms and subject to
the conditions set forth in the Merger Agreement, Sub will
commence a cash tender offer (theOffer) to purchase all the
outstanding shares of the common stock, par value $0.01 per
share, of the Company (theShares), for a purchase price of $79.00
per share in cash, without interest (the Offer Price), subject to
the terms and conditions of the Merger Agreement. Following the
closing of the Offer, Sub will merge with and into the Company
(theMerger), with the Company continuing as the surviving
corporation in the Merger. The Merger Agreement also provides
that the Merger may be consummated regardless of whether the
Offer is completed, but if the Offer is not completed, the Merger
will only be consummated after the shareholders of the Company
have adopted and approved the Merger Agreement at a meeting of
shareholders.
to the terms and subject to the conditions set forth in the
Merger Agreement, at the effective time of the Merger (the
Effective Time), each outstanding Share (other than Shares
(a)issued and outstanding immediately prior to the Effective Time
that are directly owned by Sub at such time (including all Shares
accepted for payment to the Offer, whether or not such shares are
registered in the name of Sub or any of its affiliates as of the
Effective Time) or by any subsidiary of the Company and (b)as to
which dissenters rights have been perfected (and not withdrawn)
in accordance with applicable law) will be converted into the
right to receive the Offer Price in cash, without interest.
At the Effective Time:
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each unexercised option to acquire Shares that is outstanding immediately prior to the Effective Time will be canceled, with the holder thereof becoming entitled to receive, an amount in cash, without interest, equal to (a)the excess, if any, of (i)the Offer Price over (ii)the exercise price per Share subject to such option multiplied by (b)the number of Shares subject to such option; |
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each Share that was subject to restricted share unit awards that was subject to service-based vesting or delivery requirements (anRSU) and that is outstanding immediately prior to the Effective Time will be canceled, with the holder thereof becoming entitled to receive an amount in cash, without interest, equal to (a)the Offer Price multiplied by (b)the number of Shares subject to such RSU at the Effective Time; |
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each Share that was subject to deferred delivery requirements to a deferred stock unit awards (aDSU) that is outstanding immediately prior to the Effective Time shall be canceled, with the holder thereof becoming entitled to receive an amount in cash, without interest, equal to (a)the Offer Price multiplied by (b)the number of Shares subject to such DSU at the Effective Time; |
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each Share that was subject to restricted stock awards that was subject to performance-based vesting or delivery requirements, assuming settlement of such awards based on the attainment of performance goals at target levels (aPSU), that is outstanding immediately prior to the Effective Time shall be vested as to the number of Shares issuable to such PSU (a)based upon an assumed attainment of the target level of performance applicable to such PSU (if the Effective Time occurs during the performance period applicable to such PSU) or (b)based on actual level of performance (if the Effective Time occurs after the performance period applicable to such PSU) (thePSU Shares), and canceled, with the holder thereof becoming entitled to receive an amount in cash, without interest, equal to (i)the Offer Price multiplied by (ii)the number of PSU Shares attributable to such PSU; and |
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each Share that was subject to restricted stock awards that were subject to service-based vesting or delivery requirements (aCompany Restricted Stock Award) that is outstanding immediately prior to the Effective Time shall, at the Effective Time, be canceled, with the holder thereof becoming entitled to receive, on the date which the Effective Time occurs, an amount in cash, without interest, equal to (a)the Offer Price multiplied by (b)the number of Shares subject to such Company Restricted Stock Award at the Effective Time. |
The Merger Agreement contains various customary representations,
warranties and covenants, including, among others, covenants with
respect to the conduct of each of the Companys business prior to
the closing.
The Company has also granted to Sub an option (theTop-Up) to
purchase at a price per share equal to the Offer Price, a number
of newly issued, fully paid and nonassessable Shares (theTop-Up
Shares) equal to the lowest number of Shares that,
when added to the number of Shares owned, directly or indirectly,
by Sub (and, if applicable, Parent) at the time of the closing of
the Top-Up, constitutes one Share more than 90% of the Shares on
a fully diluted basis, but not less than one share more than 90%
of the Shares outstanding immediately prior to the issuance of
such Top-Up Shares; provided that the Top-Up may not be exercised to
purchase an amount of Top-Up Shares in excess of the number of
Shares authorized and unissued and not reserved for issuance at
the time of exercise of the Top-Up.
The completion of
the Offer is subject to customary conditions, including, among
others: (a)that the number of Shares validly tendered and not
validly withdrawn prior to the expiration of the Offer, when
added to the Shares owned by Parent and its affiliates,
represents at least a majority of the fully diluted shares of the
company as of the expiration of the Offer (without giving effect
to the closing of the Top-Up); (b)the absence of a material
adverse effect on the Company; and (c)the satisfaction or waiver
of other customary closing conditions as set forth in the Merger
Agreement, including approval from antitrust authorities in the
United States.
The Company has
also agreed not to (a)solicit proposals relating to certain
alternative transactions or (b)enter into discussions or
negotiations or provide non-public information in connection with
any proposal for an alternative transaction from a third party,
subject to certain exceptions to permit the Companys board of
directors to comply with its fiduciary duties. Notwithstanding
these no-shop restrictions, under specified circumstances the
Companys board of directors may change its recommendation and may
also terminate the Merger Agreement either (i)to accept a
superior proposal or (ii)in response to an intervening event, in
each case upon payment of the termination fee described
below.
The Merger
Agreement contains termination rights for each of the Company and
Parent, among others, if the Offer expires at a time when Parent
is not obligated to consummate or extend the Offer under the
Merger Agreement. Upon termination of the Merger Agreement under
specified circumstances, including (a)a termination by the
Company to accept a superior proposal that did not result from a
breach of the non-solicitation provisions and enter into an
agreement providing for such superior proposal immediately
following or concurrently with such termination, (b)termination
by Parent following (i)a change of recommendation by the board of
directors of the Company, (ii)the Companys failure to include the
recommendation of the board of directors of the Company in favor
of the Offer in its Schedule 14D-9 or proxy statement to be
delivered to shareholders, (iii)the failure of the board of
directors of the Company to reaffirm its recommendation in favor
of the Offer or (iv)the commencement of a tender or exchange
offer relating to the securities of the Company if the Company
has not, within ten business days after the commencement of such
tender or exchange offer disclosed that the Company recommends
rejecting such tender or exchange offer, the Company would be
required to pay Parent a termination fee of $51million (the
Termination Fee). Under certain additional circumstances
described in the Merger Agreement, the Company must also pay
Parent the Termination Fee if the Merger Agreement is terminated,
a competing acquisition proposal has previously been publicly
made, and the Company enters into an agreement for an alternative
change of control transaction that is subsequently consummated
within 12 months following such termination.
A copy of the
Merger Agreement is attached hereto as Exhibit 2.1 and is
incorporated herein by reference. The foregoing description of
the Merger Agreement does not purport to be complete and is
qualified in its entirety by reference to the full text of the
Merger Agreement. The Merger Agreement has been attached to
provide investors with information regarding its terms. It is not
intended to provide any other factual information about the
Company, Parent, Intermediate Parent or Sub. In particular, the
assertions embodied in the representations and warranties in the
Merger Agreement were made as of a specified date, are modified
or qualified by information in confidential disclosure letters
provided by each party to the other in connection with the
signing of the Merger Agreement, may be subject to a contractual
standard of materiality different from what might be viewed as
material to shareholders, or may have been used for the purpose
of allocating risk between the parties. Accordingly, the
representations and warranties in the Merger Agreement are not
necessarily characterizations of the actual state of facts about
the Company, Parent, Intermediate Parent or Sub at the time they
were made or otherwise and should only be read in conjunction
with the other information that the Company makes publicly
available in reports, statements and other documents filed with
the Securities and Exchange Commission (SEC).
| Item3.02. | Unregistered Sales of Equity Securities. |
The information
set forth under Item 1.01 regarding the Top-Up is incorporated
into this Item 3.02 by reference. The Top-Up was issued without
registration under the Securities Act of 1933, as amended (the
Securities Act), in reliance upon the exemption from registration
set forth in Section 4(a)(2) of the Securities Act.
| Item5.03 |
Amendment to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
On February20,
2017, and effective as of that date, the Companys board of
directors amended the Companys Second Amended and Restated Bylaws
(the Bylaws) to add a new ARTICLE XII thereto, which designates
the Business Case Division of the Superior Court of Fulton
County, Georgia (the Business Court) and, solely if the Business
Court does not have or accept jurisdiction, the federal district
court for the Northern District of Georgia, Atlanta Division, the
District Court for the County of Hennepin, Minnesota, and the
federal court for the District of Minnesota located in
Minneapolis, Minnesota, as the sole and exclusive forums for
certain legal actions, unless the Company consents in writing to
the selection of an alternative forum.
The preceding
description of the amendment to the Bylaws is qualified in its
entirety by reference to the Amendment No.3 to the Companys
Second Amended and Restated Bylaws, a copy of which is attached
hereto as Exhibit 3.1 and is incorporated herein by
reference.
| Item7.01 | Regulation FD Disclosure. |
The Company and
Parent issued a joint press release on February 21, 2017
announcing the execution of the Merger Agreement, a copy of which
is attached hereto as Exhibit 99.1. In addition, the Company
issued a press release on February 21, 2017 announcing that, as a
result of its entry into the Merger Agreement, it has cancelled
its previously scheduled fiscal 2016 earnings conference call and
webcast, a copy of which release is attached hereto as Exhibit
99.2.
| Item9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| 2.1 |
Agreement and Plan of Merger, dated as of February 21, 2016, by and among Restaurant Brands International Inc., Restaurant Brands Holdings Corporation, Orange, Inc., and Popeyes Louisiana Kitchen, Inc. (Schedules have been omitted to Item601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally to the SEC a copy of any omitted schedule upon request.) |
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| 3.1 |
Amendment No. 3 to Second Amended and Restated Bylaws of Popeyes Louisiana Kitchen, Inc. |
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| 99.1 | Press release, dated February 21, 2017. | |
| 99.2 | Press release, dated February 21, 2017. |
Additional
Information about the Proposed Merger and Where to Find
It
The proposed
transaction described above has not yet commenced. This press
release is not an offer to buy nor a solicitation of an offer to
sell any of the Companys securities. The solicitation and the
Offer will only be made to a tender offer statement on Schedule
TO, including an offer to purchase, a letter of transmittal and
other related materials that Restaurant Brands International Inc.
intends to file with the SEC. In addition, the Company will file
with the SEC a Solicitation/Recommendation Statement on Schedule
14D-9 with respect to the proposed transaction. Once filed,
investors will be able to obtain the tender offer statement on
Schedule TO, the offer to purchase, the Companys
Solicitation/Recommendation Statement on Schedule 14D-9 and
related materials with respect to the proposed transaction free
of charge at the website of the SEC at www.sec.gov, and from the
information agent named in the tender offer materials. Investors
may also obtain, at no charge, any such documents filed with or
furnished to the SEC by the Company under the Investor Relations
section of the Companys website at http://investor.popeyes.com/.
INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THESE
DOCUMENTS WHEN THEY BECOME AVAILABLE, INCLUDING THE SOLICITATION/
RECOMMENDATION STATEMENT OF THE COMPANY AND ANY AMENDMENTS
THERETO, AS WELL AS ANY OTHER DOCUMENTS RELATING TO THE PROPOSED
TRANSACTION THAT ARE FILED WITH THE SEC, CAREFULLY AND IN THEIR
ENTIRETY PRIOR TO MAKING ANY DECISIONS WITH RESPECT TO WHETHER TO
TENDER THEIR SHARES TO THE PROPOSED TRANSACTION BECAUSE THEY
CONTAIN IMPORTANT INFORMATION, INCLUDING THE TERMS AND CONDITIONS
OF THE PROPOSED TRANSACTION.
Forward-Looking
Statements:
This current
report on Form 8-K
contains forward-looking statements within the meaning of the
federal securities laws. Statements regarding future events and
developments and the Companys future performance, as well as
managements current expectations, beliefs, plans, estimates or
projections relating to the future, are forward-looking
statements within the meaning of these laws. Forward-looking
statements are statements that do not relate strictly to
historical or current facts. These statements may include words
such as guidance, anticipate, estimate, expect, forecast,
project, plan, intend, believe, confident, may, should, can have,
likely, future and other words and terms of similar meaning in
connection with any discussion of the timing or nature of future
operating or financial performance or other events.
Examples of such statements in
this current report on Form 8-K include without limitation
statements regarding the planned completion of the Offer and the
Merger. These forward-looking statements are subject to a number
of risks and uncertainties. Among the important factors that
could cause actual results to differ materially from those
indicated by such forward-looking statements are: uncertainties
as to the percentage of the Companys shareholders tendering their
shares in the Offer, the possibility that competing offers will
be made, the possibility that various closing conditions for the
Offer or the Merger may not be satisfied or waived, including
that a governmental entity may prohibit, delay or refuse to grant
approval for the
consummation of the Merger,
the effects of disruption caused by the transaction making it
more difficult to maintain relationships with employees,
collaborators, vendors and other business partners, the risk that
shareholder litigation in connection with the Offer or the Merger
may result in significant costs of defense, indemnification and
liability, competition from other restaurant concepts and food
retailers, disruptions in the financial markets, the loss of
franchisees and other business partners, labor shortages or
increased labor costs, increased costs of the Companys principal
food products, changes in consumer preferences and demographic
trends, as well as concerns about health or food quality, the
Companys ability to protect the Companys information systems
against cyber attacks or information security breaches, the
Companys ability to protect individually identifiable data of the
Companys customers, franchisees and employees, instances of e.
coli, norovirus, avian flu or other food-borne illnesses, general
economic conditions, the loss of senior management and the
inability to attract and retain additional qualified management
personnel, limitations on the Companys business under the
Companys 2016 Revolving Credit Facility, the Companys ability to
comply with the repayment requirements, covenants, tests and
restrictions contained in its 2016 Revolving Credit Facility,
failure of the Companys franchisees, a decline in the number of
franchised units, a decline in its ability to franchise new
units, slowed expansion into new markets, unexpected and adverse
fluctuations in quarterly results, increased government
regulation, effects of volatile gasoline prices, supply and
delivery shortages or interruptions, currency, economic and
political factors that affect its international operations,
inadequate protection of its intellectual property and
liabilities for environmental contamination and the other risk
factors detailed in the Companys 2015 Annual Report on Form 10-K
and other filings with the SEC, which can be found at the SECs
website www.sec.gov. The discussions of these risks are
specifically incorporated by reference in this current report on
Form 8-K.
Any such forward looking
statements are not guarantees of performance or results, and
involve risks, uncertainties (some of which are beyond the
Companys control) and assumptions. Although the Company believes
any forward looking statements are based on reasonable
assumptions, you should be aware that many factors could affect
the Companys actual financial results and cause them to differ
materially from those anticipated in any forward looking
statements.
Any forward-looking statement
made by the Company in this current report on Form 8-K speaks
only as of the date on which it is made. The Company undertakes
no obligation to update any forward-looking statement, whether as
a result of new information, future developments or otherwise,
except as may be required by law.
to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Date: February 21,
2017
| POPEYES LOUISIANA KITCHEN, INC. | ||
| By: |
/s/ Harold M. Cohen |
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| Harold M. Cohen | ||
|
General Counsel, Chief Administrative Officer and Corporate Secretary |
EXHIBIT
INDEX
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Exhibit Number |
Description |
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| 2.1 |
Agreement and Plan of Merger, dated as of February 21, 2016, by and among Restaurant Brands International Inc., Restaurant Brands Holdings Corporation, Orange, Inc., and Popeyes Louisiana Kitchen, Inc. (Schedules have been omitted |
About Popeyes Louisiana Kitchen, Inc. (NASDAQ:PLKI)
Popeyes Louisiana Kitchen, Inc. operates and franchises quick-service restaurants (QSRs or restaurants) under the trade names Popeyes Louisiana Kitchen and Popeyes Chicken & Biscuits. The Company operates through two segments: franchise operations and company-operated restaurants. The franchise segment consists of domestic and international franchising activities. Within the QSR industry, it offers Louisiana style menu that features spicy chicken, chicken tenders, fried shrimp and other seafood, red beans and rice and other regional items. It operates and franchises approximately 2,539 Popeyes restaurants in over 48 states, the District of Columbia, three territories and 27 foreign countries. Its approximately 1,900 domestic franchised restaurants are concentrated in Texas, California, Florida, Louisiana, New York, Illinois, Georgia, Maryland, New Jersey, Virginia and Mississippi. Its approximately 569 international franchised restaurants are located in Turkey, South Korea and Canada. Popeyes Louisiana Kitchen, Inc. (NASDAQ:PLKI) Recent Trading Information
Popeyes Louisiana Kitchen, Inc. (NASDAQ:PLKI) closed its last trading session up +12.61 at 78.73 with 7,302,243 shares trading hands.
