PDM Royalties Income Trust's proposed amalgamation with Imvescor receives positive recommendations from two leading independent proxy advisory firms
Wed Aug 26, 6:26 PMMONCTON, NB, Aug. 26 /CNW Telbec/ - PDM Royalties Income Fund's ("PDM" or the "Fund") (TSX: PDM.UN, PDM.DB) Board of trustees (the "Trustees") is pleased to announce that two leading independent proxy advisory firms have joined them in recommending that PDM's unitholders (the "Unitholders") vote in favour of the proposed conversion of the Fund to corporate status and its subsequent amalgamation with Imvescor Inc. ("Imvescor") to form a new, publicly traded company to be named Imvescor Restaurant Group Inc. ("IRG") (the "Arrangement"). The proposed Arrangement is the key matter for consideration at the annual and special meeting of Unitholders to be held in Halifax, Nova Scotia, on September 4, 2009.
One of the two leading independent proxy advisory firms, RiskMetrics Group, states in its report that the Arrangement "enables the conversion of the Fund into a publicly traded corporation in a tax efficient manner and the consolidation of the overall restaurants business into a single entity."(1) It recommends Unitholders vote for the Arrangement.
Glass Lewis and Co, the other leading independent proxy advisory firm, writes in its report that "there are adequate reasons to justify the proposed conversion, including the imminent implementation of the new tax regime and the Fund's prospects for future expansion."(2) Accordingly, it recommends Unitholders vote for the Arrangement.
The Trustees' unanimous recommendation that Unitholders vote in favour of the Arrangement, based on the fairness opinion received from RSM Richter, an independent financial advisor to the Trustees, is supported by the positive recommendations of two leading independent proxy advisory firms. The Trustees believe that the main benefits of the Arrangement for Unitholders are:
- Defined Capital Structure: With the 2011 income trust deadline fast
approaching, the Arrangement will put to rest the uncertainty regarding
the Fund's capital structure, and will not only provide investors with
enhanced trading liquidity, but will also facilitate access to capital
for future financings.
- Elimination of "vend-in" formula: In addition, following the
Arrangement, the current highly dilutive "vend-in" formula, by which
Imvescor receives units of the Fund as payment for royalty streams from
restaurants vended into PDM will be eliminated. Consequent the "vend-
in" formula will not be applicable to the new entity, IRG.
- Corporate Synergies: The newly created company, IRG, will benefit from
cost reductions resulting from synergies generated by the new
simplified corporate structure, which will include PDM's current as
well as IRG future brands and related intellectual property together
with Imvescor's franchising and distribution business.
- Improved Transparency: Investors will benefit from increased
transparency through a Board of Directors that will answer directly to
all shareholders. More importantly, all shareholders will be treated
equally.
- Stronger Leadership Team: The new company, IRG, will benefit from the
bench strength of a leading executive and operational management team
with over 150 years of combined experience in the restaurant industry,
as well as proven track records in expansion and profitable growth in
sales and EBITDA.
- Regular Dividends: PDM has already stated publicly that following the
completion of the Arrangement, IRG is expected to adopt a cash
management policy that will enable the company to pay regular dividends
in order to provide a significant level of current income to
shareholders, while providing the new company with flexibility to repay
debt (part coming due in August 2010) and/or repurchase convertible
debentures and shares in the market in a manner that will maximize long
term shareholder value.
Voting Instructions
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With the annual and special meeting of Unitholders fast approaching on September 4, 2009, unitholders are encouraged to submit their form of proxy in favour of the Arrangement before September 2, 2009 at 5:00 pm (Atlantic Time). Unitholders should vote using one of the quicker options available as noted on the management form of proxy, preferably by telephone, internet or fax, where applicable.
For more information on how to vote your proxy or to request a free copy of the Management Circular and related materials, please contact the Fund's Solicitation Agent, Kingsdale Shareholder Services, at 1-800-775-4067.
About PDM Royalties Income Fund
The Fund is a limited purpose open-ended trust established under the laws of Ontario. The Fund indirectly owns the trademarks and intellectual property for the Pizza Delight(R), Mikes(R), Scores(R), and Baton Rouge(R) brands and has licensed them to Imvescor in consideration for a royalty equal to 4% of system sales for Pizza Delight(R) and Mikes(R) restaurants, and a royalty rate of 6% for Scores(R) and Baton Rouge(R) restaurants.
About Imvescor
Imvescor is a privately owned corporation, headquartered in Moncton, New Brunswick. Pizza Delight(R) operates primarily in Atlantic Canada, where it dominates the family/mid-scale segment. Mikes(R) and Scores(R) restaurants operate primarily in Quebec in the family and casual dining segments and the take-out and delivery segments. Baton Rouge(R) operates in the Province of Quebec and Ontario in the casual dining segment.
Forward-Looking Statements
Certain information regarding the Fund contained herein may constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Although the Fund believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. The Fund cautions that actual performance will be affected by a number of factors, many of which are beyond the Fund's control, and that future events and results may vary substantially from what the Fund currently foresees. Discussion of the various factors that may affect future results is contained in the annual information form of the Fund and the information circular in respect of the upcoming annual and special meeting, which are available at www.sedar.com. The Fund assumes no obligation to update such forward-looking statements, except as required by applicable securities laws. The Fund's forward-looking statements are expressly qualified in their entirety by this cautionary statement.
(1) *Permission to quote from the Glass Lewis and RiskMetrics reports
were neither sought nor obtained
(2) Idem
ContactsMélanie Joly Cohn & Wolfe Public Relations
(514) 845-2257 ext 247 William R. Lane
CMA
Executive Vice-President and Chief Financial Officer
Imvescor Inc.
(506) 853-8412 Kingsdale Shareholder Services
1-800-775-4067 Visit our web sites: www.pdmfund.ca
www.imvescor.ca
www.pizzadelight.ca
www.mikes.ca
www.scores.ca
www.batonrougerestaurants.com
