BBQ HOLDINGS, INC. Item 1.01 Entry into a Material Definitive Agreement
Agreement and Plan of Merger
On
The Company's Board of Directors (the "Board") has determined that the transactions contemplated by the Merger Agreement, including the Offer and the Merger, are fair to, advisable and in the best interests of the Company and its shareholders, has approved the Merger Agreement and the transactions contemplated by the Merger Agreement, and has recommended that the shareholders of the Company accept the Offer and tender their shares of Common Stock in the Offer.
The Merger Agreement provides that Parent will cause Merger Sub to commence, as
promptly as practicable, but in no event later than 15 business days after the
initial public announcement of the execution of the Merger Agreement, the Offer
for all of the Company's outstanding shares of Common Stock at a purchase price
of
Subject to the terms and conditions of the Merger Agreement, the Offer will
initially remain open for 20 business days from the date of commencement of the
Offer. If, at the scheduled expiration time of the Offer, any of the conditions
to the Offer have not been satisfied or waived, then Merger Sub will extend the
Offer for one or more consecutive increments of at least 5 and up to 10 business
days to permit the satisfaction of all Offer conditions, except that if the sole
remaining unsatisfied Offer condition is the Minimum Condition (as defined
below), Merger Sub will not be required to extend the Offer for more than one
such additional increment, but may elect to do so in its sole discretion. In any
event, Merger Sub will not be required to extend the Offer to a date later than
The obligation of Merger Sub to purchase shares of Common Stock tendered in the
Offer is subject to customary closing conditions, including (1) shares of Common
Stock having been validly tendered (and not validly withdrawn) prior to the
expiration of the Offer that represent, together with the shares of Common Stock
then owned by Merger Sub, at least a majority of the then issued and outstanding
shares of Common Stock (determined on a fully diluted basis (which assumes
conversion of exercise of all derivative securities regardless of the conversion
or exercise price, the vesting schedule, or other terms and conditions thereof)
(the "Minimum Condition"), (2) the absence of any law, injunction, judgment or
other legal restraint that prohibits, or any instituted and pending legal
proceeding by any governmental authority challenging or seeking to make illegal,
delay materially or otherwise enjoin or prohibit, the consummation of the Offer
or the Merger, (3) the expiration or early termination of the waiting period
applicable to the Offer and the Merger under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the absence of any voluntary agreement
with the
Following the consummation of the Offer, and subject to the satisfaction or waiver of certain conditions set forth in the Merger Agreement, the Merger will be effected pursuant to the procedure provided for by Section 302A.613(4) of the Minnesota Business Corporation Act ("MBCA") without a meeting or vote of the Company's shareholders. The Merger will be effected as soon as practicable following the acceptance of shares representing at least the Minimum Condition validly tendered and not validly withdrawn pursuant to the Offer (the "Offer Acceptance Time").
At the effective time of the Merger (the "Effective Time"), each share of Common Stock issued and outstanding immediately before the Effective Time (other than shares (1) owned by the Company as treasury stock, (2) owned by Merger Sub, including any shares irrevocably accepted for purchase by Merger Sub in the Offer or (3) owned by any shareholder who is entitled to demand and properly demands the appraisal of such shares in accordance with, and in compliance in all respects with, the MBCA) will be automatically cancelled and converted into the right to receive the Offer Price (the "Merger Consideration"), without interest and subject to any required withholding taxes.
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In addition, at the Effective Time (1) each outstanding Company stock option, whether or not then exercisable or vested, will be canceled and converted into the right to receive an amount in cash, without interest and subject to any required withholding taxes, equal to the excess, if any, of the Merger Consideration over the per share exercise price applicable to such Company stock option, multiplied by the total number of shares subject to such Company stock option, (2) each outstanding award of time-based restricted stock units and each earned award of performance-based restricted stock units will be vested as of immediately before the Effective Time and will be canceled and converted into the right to receive an amount in cash, without interest and subject to any required withholding taxes, equal to the Merger Consideration, multiplied by the number of shares of Common Stock subject to such award, and (3) each outstanding unearned award of performance-based restricted stock units will be vested at the target level for such award as of immediately before the Effective Time and will be canceled and converted into the right to receive an amount in cash, without interest and subject to any required withholding taxes, equal to the Merger Consideration, multiplied by the number of shares of Common Stock subject to such award.
The Merger Agreement contains representations, warranties, and covenants of the parties customary for a transaction of this nature, including an agreement that the parties will use reasonable best efforts to cause the Offer and the Merger to be consummated. The Company has also agreed (1) to operate its business in the ordinary course consistent with past practice in all material respects, (2) to certain other restrictions on its operations, as set forth more fully in the Merger Agreement and (3) not to solicit other proposals to acquire the Company or to participate in discussions or provide information in connection with other proposals to acquire the Company, subject to certain exceptions to permit the Board to comply with its fiduciary obligations.
Prior to the Offer Acceptance Time, the Board may (1) terminate the Merger Agreement to enter into an agreement with respect to a Superior Proposal (as defined in the Merger Agreement), or (2) change its recommendation that the Company's shareholders accept the Offer and tender their Shares in the Offer in connection with an Intervening Event (as defined in the Merger Agreement), in each case subject to compliance with notice and other specified conditions, including giving Parent the opportunity to propose revisions to the terms of the Merger Agreement, and in the case of termination, upon payment of the termination fee discussed below.
The Merger Agreement contains certain termination rights for the Company and
Parent. Upon termination of the Merger Agreement under specified circumstances,
the Company will be required to pay Parent a termination fee of
The representations, warranties and covenants of the Company contained in the
Merger Agreement have been made solely for the benefit of Parent and Merger Sub.
In addition, such representations, warranties and covenants (1) have been made
only for purposes of the Merger Agreement, (2) have been qualified by
(a) matters specifically disclosed in certain reports filed by the Company with
the
Item 8.01 Other Events Tender and Support Agreement
In connection with the Offer and Merger, and concurrently with the execution of
the Merger Agreement, Parent and Merger Sub entered into a Tender and Support
Agreement (the "Support Agreement") with certain shareholders of the Company, as
well as certain of the Company's directors and executive officers (each, a
"Supporting Shareholder"). Pursuant to the Support Agreement, the Supporting
Shareholders have agreed to tender shares of Common Stock held by them in the
Offer and to otherwise support the transactions contemplated by the Merger
Agreement. The Supporting Shareholders beneficially owned, as of
The Support Agreement terminates upon the occurrence of certain circumstances, including in the event that the Merger Agreement is terminated in accordance with its terms.
The foregoing description of the Support Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Support Agreement, a form of which is attached hereto as Exhibit 99.1 and incorporated herein by reference.
On
Important Information
The tender offer for the outstanding Common Stock of the Company referred to in
this document has not yet commenced. This document is not a recommendation, an
offer to purchase or a solicitation of an offer to sell shares of the Company's
Common Stock. The solicitation and the offer to purchase shares of the Company's
Common Stock will only be made pursuant to an offer to purchase and related
materials that Parent and Merger Sub intend to file with the
Shareholders of the Company are advised to read the Schedule TO (including an
offer to purchase, a related letter of transmittal and other offer documents)
and the solicitation/recommendation statement on Schedule 14D-9, as each may be
amended or supplemented from time to time, and any other relevant documents
filed with the
Investors may obtain free copies of the Schedule TO and Schedule 14D-9, as each
may be amended or supplemented from time to time, and other documents filed by
the parties (when available), at the
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Forward-Looking Statements
Certain forward-looking statements made in this communication, including any
statements as to future results of operations and financial projections, may
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, as amended. Forward-looking statements
include, among other things, statements about the potential benefits of the
proposed transaction; the prospective performance and outlook of the surviving
company's business, performance and opportunities; the ability of the parties to
complete the proposed transaction and the expected timing of completion of the
proposed transaction; as well as any assumptions underlying any of the
foregoing. Forward-looking statements are based on management's current
expectations, beliefs, estimates, projections, and assumptions. As such,
forward-looking statements are not guarantees of future performance and involve
inherent risks and uncertainties that are difficult to predict. As a result,
actual future results and trends may differ materially from what is forecast in
forward-looking statements. The following are some of the factors that could
cause actual future results to differ materially from those expressed in any
forward-looking statements: (i) uncertainties as to the timing of the Offer;
(ii) the risk that the proposed transaction may not be completed in a timely
manner or at all; (iii) the possibility that competing offers or acquisition
proposals for the Company will be made; (iv) the possibility that any or all of
the various conditions to the consummation of the Offer may not be satisfied or
waived, including the failure to receive any required regulatory approvals from
any applicable governmental entities; (v) the possibility that prior to the
completion of the proposed transaction, the Company's business may experience
significant disruptions due to transaction-related uncertainty; (vi) the
occurrence of any event, change or other circumstance that could give rise to
the termination of the Merger Agreement, including in circumstances that would
require the Company to pay a termination fee or other expenses; (vii) the effect
of the announcement or pendency of the proposed transaction on the Company's
ability to retain and hire key personnel, its ability to maintain relationships
with its customers, franchisees, suppliers and others with whom it does
business, and its operating results and business generally; (viii) the risk that
shareholder litigation in connection with the proposed transaction may result in
significant costs of defense, indemnification and liability; and (ix) other
factors as set forth from time to time in the Company's filings with the
Item 9.01 Financial Statements and Exhibits
(d) Exhibits. The following exhibits are filed with this report:
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT 2.1 Agreement and Plan of Merger, dated as ofAugust 8, 2022 , by and amongMTY Franchising USA, Inc. ,Grill Merger Sub, Inc. andBBQ Holdings, Inc. * 10.1 Guarantee, dated as ofAugust 8, 2022 , by MTY Food Group Inc. in favor ofBBQ Holdings, Inc. 99.1 Tender and Support Agreement, dated as ofAugust 8, 2022 , by and amongMTY Franchising USA, Inc. ,Grill Merger Sub, Inc. and each of the Persons set forth on Schedule A thereto 99.2 Joint press release issued by MTY Food Group Inc. andBBQ Holdings, Inc. , datedAugust 9, 2022
* Schedules omitted pursuant to Item 601(b)(2) of Regulation S-K.
agrees to furnish a supplemental copy of any omitted schedule to the Securities
and
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