Introductory Note
As previously disclosed on August 9, 2022, in the Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) by BBQ Holdings, Inc., a Minnesota corporation (the “Company”), the Company is party to an Agreement and Plan of Merger, dated as of August 8, 2022 (the “Merger Agreement”), by and among the Company, MTY Franchising USA, Inc. (“Parent”) and Grill Merger Sub, Inc. (“Merger Sub”), a wholly-owned subsidiary of Parent, providing for the acquisition of the Company by Parent in an all-cash transaction consisting of a tender offer (the “Offer”) for all of the outstanding shares of common stock, par value $0.01 per share (the “Common Stock”), of the Company by Merger Sub, followed by a subsequent merger of Merger Sub with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly-owned subsidiary of Parent. Parent and Merger Sub are affiliates of MTY Food Group Inc. (“MTY”).
| Item 2.01. | Completion of Acquisition or Disposition of Assets |
Pursuant to the Merger Agreement, on August 24, 2022, Merger Sub commenced the Offer to acquire all of the outstanding shares of Common Stock (“Shares”) for $17.25 per Share, net to the seller in cash, without interest and subject to any required withholding of taxes (the “Merger Consideration”), upon the terms and subject to the conditions set forth in the Offer to Purchase, dated August 24, 2022 (as amended or supplemented), and the related Letter of Transmittal.
The Offer and withdrawal rights expired one minute following 11:59 p.m. (12:00 midnight), New York City Time, on Wednesday, September 21, 2022 (the “Expiration Time”). Broadridge Corporate Issuer Solutions, Inc., in its capacity as depositary and paying agent for the Offer (the “Depositary and Paying Agent”), has advised Parent and Merger Sub that, as of the Expiration Time, a total of 9,724,637 Shares (excluding Shares with respect to which notices of guaranteed delivery were delivered but which Shares were not yet delivered) had been validly tendered and not withdrawn pursuant to the Offer, representing approximately 91.94% of the outstanding Shares.
All conditions to the Offer having been satisfied, on September 26, 2022, Merger Sub accepted for payment (such time of acceptance for payment, the “Acceptance Time”) all such Shares validly tendered and not properly withdrawn pursuant to the Offer on or prior to the Expiration Time, and payment for such Shares will be made by the Depositary and Paying Agent in accordance with the terms of the Offer.
On September 27, 2022, pursuant to the terms of the Merger Agreement and in accordance with Section 302A.613(4) of the Minnesota Business Corporation Act (the “MBCA”), Merger Sub merged with and into the Company, with the Company surviving as a wholly-owned subsidiary of Parent. At the effective time of the Merger (the “Effective Time”), each issued and outstanding Share (other than any Shares (i) owned by BBQ Holdings as treasury stock, (ii) owned by Merger Sub or Parent (or their respective wholly-owned subsidiaries) or that were irrevocably accepted for purchase by Merger Sub in the Offer, or (iii) held by the Company’s shareholders who properly asserted dissenters’ rights to obtain payment for the fair value of their Shares and who did not lose or withdraw their dissenters’ rights under the MBCA) was canceled and converted automatically into the right to receive an amount in cash equal to the Merger Consideration.
In addition, at the Effective Time, (i) each outstanding Company stock option, whether or not then exercisable or vested, was 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, and (ii) each outstanding award of restricted stock units and each outstanding unvested award of restricted stock vested as of immediately before the Effective Time and was 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 aggregate consideration paid in the Offer and the Merger was approximately $192,462,276.69, excluding related transaction fees and expenses. The aggregate consideration, and related fees and expenses were funded with cash on hand and available borrowings under Parent’s credit facility (as more fully described in the Offer to Purchase).
The foregoing summary description of the Merger Agreement and related transactions does not purport to be complete and is qualified in its entirety by reference to the terms of the Merger Agreement, which was filed as Exhibit 2.1 to the Current Report on Form 8-K filed by the Company with the SEC on August 9, 2022 and is incorporated by reference into this Item 2.01.
| Item 3.01. | Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing |
On September 27, 2022, the Company notified the Nasdaq Global Select Market (“Nasdaq”) of the consummation of the Merger and requested that Nasdaq file with the SEC a notification on Form 25 to delist and deregister the Shares under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
