Boston, MA 08/28/2014 (wallstreetpr) – Last week was overflowed with the acquisition news of Tim Hortons Inc. (USA) (NYSE:THI) by Burger King Worldwide Inc (NYSE:BKW) in as much as $12.5-billion. Although it seemed easy for BKW initially, but as per the reports it may have to go through objections from shareholders and regulators in Canada.
What’s in the deal:
As per the terms and conditions of the deal, shareholders of Tim Hortons Inc. (USA) (NYSE:THI) will receive 0.8025 of a share and $65.50 in cash in Canadian currency. It makes the per share offering around $94 a share (on the basis of Burger King Worldwide Inc (NYSE:BKW)’s closing share price on August 25, 2014). There are different rumors in the market about this deal, but most of the market experts consider it a no-objection deal for THI shareholders.
According to David Baskin, President of Baskin Financial Services Inc., “No one will say no to $94 per share. It looks an ideal deal for Tim Hortons Inc. (USA) (NYSE:THI) shareholders.” He gave this information over the phone interview. As per the market reports, Baskin’s firm manages around $700 million and holds shares of THI and Oakville. He said that he was very happy with the amount because it was much more than what he expected.
One of the main reasons behind this deal could be the tax saving. Burger King Worldwide Inc (NYSE:BKW) will be able to save a huge amount of tax due to this transaction. The new combined entity will have its office in a yet-to-be-determined Canadian location. Joe Oliver, Finance Minister of Canada, said, “The foreign investment agency of Canada will follow the normal course of action and review the proposed transaction.” The Canadian government is attentive towards all the transactions below $354 million, just to ensure that those transactions are done with a long term objective. The proposed transaction needs shareholders’ votes and regulatory approval at Tim Hortons Inc. (USA) (NYSE:THI) to be executed. According to one of the market experts, there are many other hurdles that can come in the way.
