With the Special Meeting coming up on Tuesday December 9, 2014, a lot of shareholders seem confused regarding the transaction. I wrote this mini article on Seeking Alpha to help out confused shareholders. In reality, you have until Monday 11 am to choose what consideration (cash, share, or both) you want for your shares. That hard deadline might fluctuate with the broker or person you are dealing with.
I also recommend that you read the comment section at the end of the article because there’s some interesting questions.
One of the most confusing aspect to some people is why the current price of a Tim Hortons share is trading above the established deal ($89.39). One of reason why THI is trading above the original terms is because part of the consideration is linked to Burger King (BKW) shares and BKW shares are trading pretty high right now. There’s some math and exchange rate involved in the conversion.
Also not updated in the article is right after the article was published, the Government of Canada announced that they were approving the deal. My article stated that it would come a little later.
Feel free to join the discussion.
If you are a last-minute voter, I threw together a quick and easy informational article regarding the upcoming special resolution meeting. This is a follow-up on a previous article on THI, following the merger announcement with Burger King (NYSE:BKW). This is also most likely my last article on Tim Hortons, assuming the transaction is completed.
You probably received a 640-page document in the mail detailing the arrangement. If your mailbox is too small, you can read the information here. The likelihood that you read a document written by an army of lawyers is pretty slim. So here’s a brief summary of the relevant info.
As you already know, you have to make another important decision:
1) $65.50 in cash + 0.8025 newly issued shares of the new Holding
2) $88.50 in cash
3) Receive 3.0879 new issued shares of the new Holding
You have until 11 am Monday December 8th, 2014 to submit your response. The shareholder meeting is scheduled on December 9th, 2014 at 10 am in Oakville, Ontario. You might ask yourself “Does my vote matter?” Of course, every vote matters, especially since it’s votes cast that counts. If you are against the transaction, you better hope that the institutional investors that hold 67% of the shares forget to vote.
Unfortunately, any decision you make will trigger a capital gain on the disposition. This doesn’t affect you if you hold your shares in an RRSP or TFSA.
If you are not voting, you will receive choice #1, the mixed consideration. How do you vote? It depends if you are a registered shareholder or not. If you are not sure, call your broker, that’s the easiest way to get information. If you are a registered shareholder, you can vote by phone at 1-866-732-8683, online atinvestorvote.com, by mail or in person at the special meeting. For the merger to be approved, it needs an affirmative vote of at least 66.6% of the votes cast on the arrangement.
If you feel you are not getting a fair deal, you are allowed to dissent, thanks to section 190 of the CBCA. You have until 5 pm December 5th, 2014 to dissent. Section 190 permits a shareholder to dissent and sell his or her shares back to the corporation at a “fair value,” in the event that a fundamental change occurs in the corporation. By the way, if you vote in favor of the arrangement, you lose your right to dissent.