THE HABIT RESTAURANTS, INC. Item 1.01 Entry into a Material Definitive Agreement.
Agreement and Plan of Merger
On
At the effective time of the Merger (the "Effective Time"), each:
(i) share of Class A common stock, par value $0.01 per share, of the Company
("Class A Common Stock") (1) that is issued and outstanding immediately
prior to the Effective Time and (2) resulting from the exchange of units
of Habit Restaurants, LLC ("LLC Units"), as described below (other than,
with respect to the foregoing clauses (1) and (2), any shares of Class A
Common Stock (A) owned by the Company or any direct or indirect
wholly-owned subsidiary of the Company, (B) owned by Parent, Merger Sub
or any direct or indirect wholly-owned subsidiary of Parent or Merger Sub
or (C) held by stockholders that have properly exercised and perfected
appraisal rights under Delaware law) will be cancelled and automatically
converted into the right to receive cash in an amount equal to $14.00 ,
without interest thereon (the "Merger Consideration"), subject to
applicable tax withholding;
(iii) option (each, a "Company Stock Option") to acquire shares of Class A
Common Stock that is outstanding immediately prior to the Effective Time
that has an exercise price per share that is less than the Merger
Consideration will be cancelled and the former holder of such cancelled
Company Stock Option will be entitled to receive (without interest), in
consideration for the cancellation of such Company Stock Option, an
amount in cash equal to the product of (x) the total number of shares
subject to the unexercised portion of such Company Stock Option
immediately prior to the Effective Time multiplied by (y) the excess of
the Merger Consideration over the applicable exercise price per share
under such Company Stock Option; provided that if the exercise price per
share of any such Company Stock Option is equal to or greater than the
Merger Consideration, such Company Option will be cancelled for no
consideration; and
(iv) restricted stock unit of the Company (each, a "Company RSU") that is
outstanding immediately prior to the Effective Time will be cancelled,
and the former holder of such cancelled Company RSU will be entitled to
receive (without interest), in consideration for the cancellation of such
Company RSU, an amount in cash equal to the product of (x) the total
number of shares subject to (or deliverable pursuant to) such Company RSU
immediately prior to the Effective Time multiplied by (y) the Merger
Consideration.
Consideration payable to holders of Company Stock Options and Company RSUs will be made no later than three business days after the Effective Time, net of any required withholding of taxes.
Concurrently with the Effective Time, each LLC Unit not held by the Company or
one of its subsidiaries, whether vested or unvested, together with one share of
or Class B common stock, par value
The Merger Agreement includes customary representations, warranties and covenants of the Company, Parent and Merger Sub. The Company has agreed to operate its business in the ordinary course until the Effective Time. The Company has also agreed not to, and to cause its subsidiaries and instruct its representatives not to, solicit or initiate discussions with third parties regarding other proposals for a strategic transaction involving the Company. Parent and the Company have agreed to use their reasonable best efforts to take all actions necessary to consummate the Merger, subject to certain limitations, and as is more particularly described in the Merger Agreement.
The obligation of the parties to consummate the Merger is subject to the expiration of the waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary conditions. The Merger Agreement includes no financing contingency of any kind, and the Company has the ability to seek specific performance of enforce Parent's obligation to close the Merger, as is more particularly described in the Merger Agreement.
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The Merger Agreement also includes customary termination provisions for both the
Company and Parent, subject, in certain circumstances, to the payment by the
Company of a termination fee of
The Company must also pay Parent the Termination Fee if (i) (A) the Effective
Time has not occurred on or prior to
The Company Board, acting on the unanimous recommendation of the Special
Committee, unanimously (except for the abstention of directors affiliated with
The foregoing summary of the Merger Agreement does not purport to be complete
and is qualified in its entirety by reference to the full copy of the Merger
Agreement filed as Exhibit 2.1 hereto and incorporated herein by reference. The
summary and the copy of the Merger Agreement are intended to provide information
regarding the terms of the Merger Agreement and are not intended to modify or
supplement any factual disclosures about the Company in its public reports filed
with the
Item 8.01 Other Events.
On
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Additional Information and Where to Find It
In connection with the proposed Merger, the Company expects to file with the
Stockholders of the Company will be able to obtain the proxy statement, as well
as other filings containing information about the Company and the proposed
Merger, without charge, at the
Participants in the Solicitation
The Company and certain of its directors, executive officers and employees may
be deemed to be participants in the solicitation of proxies in respect of the
proposed Merger. Information regarding the interests of the Company's directors
and executive officers and their ownership of shares of the Company's common
stock is set forth in the Company's proxy statement on Schedule 14A filed with
the
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Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this communication are forward-looking statements,
including, without limitation, the statements made concerning the pending
acquisition of the Company by Parent. In some cases, you can identify
forward-looking statements by the following words: "may," "will," "could,"
"would," "should," "expect," "intend," "plan," "anticipate," "believe,"
"estimate," "predict," "project," "aim," "potential," "continue," "ongoing,"
"goal," "can," "seek," "target" or the negative of these terms or other similar
expressions, although not all forward-looking statements contain these words.
You should read any such forward-looking statements carefully, as they involve a
number of risks, uncertainties and assumptions that may cause actual results to
differ significantly from those projected or contemplated in any such
forward-looking statement. Those risks, uncertainties and assumptions include:
(i) the risk that the proposed transaction may not be completed in a timely
manner or at all, which may adversely affect the Company's business and the
price of the Company's common stock; (ii) the failure to satisfy any of the
conditions to the consummation of the proposed transaction, including the
adoption of the Merger Agreement by the Company's stockholders and the receipt
of certain regulatory approvals; (iii) the occurrence of any event, change or
other circumstance or condition that could give rise to the termination of the
Merger Agreement; (iv) the effect of the announcement or pendency of the
proposed transaction on the Company's business relationships, operating results
and business generally; (v) risks that the proposed transaction disrupts current
plans and operations and the potential difficulties in employee retention as a
result of the proposed transaction; (vi) risks related to diverting management's
attention from the Company's ongoing business operations; (vii) the outcome of
any legal proceedings that may be instituted against the Company related to the
Merger Agreement or the proposed transaction, (viii) unexpected costs, charges
or expenses resulting from the proposed transaction; and (ix) other risks
described in the Company's filings with the
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. Exhibit Number Description 2.1 Agreement and Plan of Merger, dated as ofJanuary 5, 2020 , amongThe Habit Restaurants, Inc. , YUM! Brands, Inc. andYEB Newco Inc. * 10.1 Tax Receivable Agreement Amendment, dated as ofJanuary 5, 2020 , by and amongThe Habit Restaurants, Inc. ,Habit Restaurants, LLC ,KarpReilly, LLC and certain unitholders ofHabit Restaurants, LLC * 99.1 Voting Agreement, dated as ofJanuary 5, 2020 , among YUM! Brands, Inc. and the stockholders party thereto* 99.2 Joint Press Release datedJanuary 6, 2020 issued byThe Habit Restaurants, Inc. and YUM! Brands, Inc.
* Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The
Company agrees to furnish supplementally to the Securities and Exchange
Commission a copy of any omitted schedule upon request.
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