FAT Brands (NASDAQ:FAT), a restaurant franchising company, has announced plans to undergo a merger with Fog Cutter Capital Group that have FAT stock soaring on Friday.
Here’s what FAT Brands investors need to know about the company’s merger plans.
- First off, it’s worth noting that Fog Cutter Capital Group is the controlling shareholder of FAT stock with at least an 80% stake in the company.
- The company holds $100 million of net operating loss carryforwards for FAT Brands that will be internalized after the merger.
- This will allow the company greater flexibility and more options with its financial structure.
- It will also simplify its corporate structure and allow for quicker acquisitions and other strategic options.
- To go along with the merger, FAT Brands has announced a special dividend for shareholders of FAT stock.
- Each shareholder will receive “.2319998077 shares of FAT Brands’ 8.25% Series B Cumulative Preferred Stock” for each share of FAT stock that they own.
- Any fractional shares will be paid out in cash to the stockholders.
- The special dividend payment date is Dec. 23 with investors needing to be on record as of Dec. 21 to be eligible for it.
- It’s worth noting that Fog Cutter Capital Group is exempt from this special dividend.
Andy Wiederhorn, president and CEO of FAT Brands, said this about the news.
“We look forward to 2021, when we hope to experience some normalization as the pandemic subsides. With the acquisition of Johnny Rockets, in a post-COVID environment, we continue to anticipate that the Company can generate 2x our 2019 EBITDA of $7.7 million.”
FAT stock was up 19.1% as of Friday morning.
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.