Del Taco Restaurants, Inc. (Nasdaq:TACO, TACOW) (the “Company,”
“we” or “our”) today announced that it has commenced an offer to
exchange (“Offer to Exchange”) 0.2780 shares of the Company’s
common stock (“Shares”) for each outstanding Company warrant
exercisable for Shares at an exercise price of $11.50 per Share
(the “Warrants”) (approximately one Share for every 3.6 Warrants
tendered), up to a maximum of 6,750,000 Warrants.
The Offer to Exchange commenced today and will expire, unless
extended, at 11:59 p.m., Eastern Time, on Friday, August 5, 2016.
Tenders of Warrants must be made prior to the expiration of the
Offer to Exchange and may be withdrawn at any time prior to the
expiration of the Offer to Exchange.
The purpose of the Offer to Exchange is to reduce the number of
Shares that would become outstanding upon the exercise of Warrants.
All outstanding Warrants are eligible to be tendered pursuant to
the Offer (subject to proration as described below). The Company’s
board of directors believes that by allowing holders of Warrants to
exchange one Warrant for 0.2780 Shares, the Company can potentially
reduce the substantial number of Shares that would be issuable upon
exercise of the Warrants, thus providing investors and potential
investors with greater certainty as to the Company’s capital
structure. For example, if all of the 6,750,000 eligible Warrants
were validly tendered in the Offer, the Company would issue
1,876,500 Shares in exchange for such tendered Warrants. However,
if all of the 6,750,000 eligible Warrants were exercised for Shares
pursuant to the terms of the Warrants, the Company would issue
6,750,000 Shares in such exercise.
The Offer to Exchange is not conditioned on the tender of any
minimum number of Warrants. The Offer to Exchange is, however,
subject to certain customary conditions.
The Company will exchange all Warrants properly tendered and not
properly withdrawn prior to the expiration of the Offer to
Exchange, subject to proration, as described in the Offer to
Exchange Letter that was filed with the U.S. Securities and
Exchange Commission (the “SEC”) and is being distributed to Warrant
holders. Because of the proration provisions described in the Offer
to Exchange Letter, the Company may exchange less than all of the
Warrants tendered by a Warrant holder if more than an aggregate of
6,750,000 Warrants are properly tendered and not properly
withdrawn.
All of our directors and executive officers who beneficially own
Warrants have agreed to participate in the Offer and in aggregate
have agreed to tender not less than 1,500,000 of their
Warrants.
Levy Family Partners, LLC holds 1,769,652 Warrants. Lawrence F.
Levy and Ari B. Levy, each a director of the Company, are two of
the four managers of Levy Family Partners, LLC. The four managers
of Levy Family Partners, LLC, acting by majority vote, exercise
voting and dispositive control over the Warrants held by Levy
Family Partners, LLC. Levy Family Partners, LLC has agreed to
tender not less than 665,000 of its Warrants.
The Ari Levy 2003 Investment Trust, a trust established for the
benefit of Ari B. Levy, a director of the Company, holds 1,792,095
Warrants. The Ari Levy 2003 Investment Trust has agreed to tender
not less than 670,300 of its Warrants.
PW Acquisitions, LP holds 600,000 Warrants. Patrick Walsh, a
director of the Company, is the chief executive officer and
managing member of the General Partner of PW Acquisitions, LP and
exercises voting and dispositive power over these Warrants. PW
Acquisitions, LP has agreed to tender not less than 164,000 of its
Warrants.
The R.J. Investment Trust, a trust established for the benefit
of R.J. Melman, a director of the Company, holds 2,500 Warrants.
The R.J. Investment Trust has agreed to tender not less than 700 of
its Warrants.
None of the Company, its board of directors, officers or
employees, nor the financial advisor, depositary or the information
agent makes any recommendations to Warrant holders as to whether to
tender or refrain from tendering their Warrants pursuant to the
Offer to Exchange Letter. Warrant holders must decide how many
Warrants they will tender, if any.
In March 2016, the Company’s board of directors authorized the
Company to repurchase up to $25 million of the Company’s
outstanding Shares and Warrants. The Company has repurchased
990,555 Shares and 476,806 Warrants under the repurchase program
for an aggregate of $10.5 million, consisting of $9.5 million to
repurchase Shares and $1.0 million to repurchase Warrants, with
$14.5 million remaining for future repurchases of Shares and
Warrants under this authorization. There has been no change to this
program as a result of the Offer to Exchange. The timing, actual
number and value of shares purchased will depend on the Company’s
stock price, market conditions, and other factors. As of July 8,
2016, the Company had 37,976,206 outstanding Shares and 12,162,817
outstanding Warrants.
The financial advisor for the Offer to Exchange is Piper Jaffray
& Co. The information agent for the Offer to Exchange is Morrow
Sodali. The depositary for the Offer to Exchange is Continental
Stock Transfer & Trust Company. The Offer to Exchange,
Letter of Transmittal and related documents are being mailed to
Warrant holders of record and will be made available for
distribution to beneficial owners of the Warrants.
Additional Information. This press release is for
informational purposes only and is not an offer to purchase or a
solicitation of an offer to sell securities. The Offer to Exchange
described above is made only pursuant to a Tender Offer Statement
on Schedule TO and related exhibits, including the Offer to
Exchange Letter, Letter of Transmittal and other related documents,
filed with the SEC. Warrant holders should read the Tender Offer
Statement on Schedule TO, Offer to Exchange Letter, Letter of
Transmittal and related exhibits, as they contain important
information about the Offer to Exchange. Warrant holders can obtain
these documents free of charge from the SEC’s website at
www.sec.gov, or by directing a request to the information agent for
the Offer to Exchange, Morrow Sodali, toll-free (855) 291-6792
(banks and brokerage firms, please call (203) 658-9400).
About Del Taco Restaurants, Inc.
Founded in 1964 in Southern California, Del Taco (NASDAQ: TACO)
is the nation’s second largest Mexican Quick Service Restaurant
chain. Known for serving Mexican and American favorites prepared
fresh in every restaurants’ working kitchen, Del Taco’s menu items
taste better because they are made with fresh ingredients like
cheddar cheese grated from 40-lb blocks, hand chopped pico de
gallo, fresh sliced avocado, slow cooked beans made from scratch,
and fresh-grilled marinated chicken and carne asada steak. In June
2016, Del Taco reinvigorated its UnFreshing Believable® marketing
campaign to further communicate its commitment to serve guests
everything that they love, including choosing not to choose between
tacos and fries, fresh prep and fair price, or great tasting food
and the convenience of a drive thru. With nearly 550 restaurants in
16 states, Del Taco serves more than three million guests each
week. For more information, follow Del Taco on Twitter, Facebook
and Instagram or visit www.deltaco.com.
Forward-Looking Statements
In addition to historical information, this release may contain
a number of “forward-looking statements” as defined in the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements include, without limitation, information concerning
completion of the Offer to Exchange, the Company’s possible or
assumed future results of operations, business strategies,
competitive position, industry environment, potential growth
opportunities and the effects of regulation. These statements are
based on the Company’s management’s current expectations and
beliefs, as well as a number of assumptions concerning future
events. When used in this press release, the words “estimates,”
“projected,” “expects,” “anticipates,” “forecasts,” “plans,”
“intends,” “believes,” “seeks,” “target,” “may,” “will,” “should,”
“future,” “propose,” “preliminary,” “guidance” and variations of
these words or similar expressions (or the negative versions of
such words or expressions) are intended to identify forward-looking
statements. Such forward-looking statements are subject to known
and unknown risks, uncertainties, assumptions and other important
factors, many of which are outside the Company’s management’s
control that could cause actual results to differ materially from
the results discussed in the forward-looking statements. These
risks include, without limitation, consumer demand, our inability
to successfully open company-owned or franchised restaurants or
establish new markets, competition in our markets, our inability to
grow and manage growth profitably, adverse changes in food and
supply costs, our inability to access additional capital, changes
in applicable laws or regulations, food safety and foodborne
illness concerns, our inability to manage existing and to obtain
additional franchisees, our inability to attract and retain
qualified personnel, our inability to profitably expand into new
markets, changes in, or the discontinuation of, the Company’s stock
and Warrant repurchase program, and the possibility that we may be
adversely affected by other economic, business, and/or competitive
factors. Additional risks and uncertainties are identified and
discussed in the Company’s reports filed with the SEC and available
at the SEC’s website at www.sec.gov and the Company’s website at
www.deltaco.com.
Forward-looking statements included in this release speak only
as of the date of this release. The Company undertakes no
obligation to update its forward-looking statements to reflect
events or circumstances after the date of this release or
otherwise.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160711005382/en/
For Del Taco Restaurants, Inc.Media:Julia Young,
646-277-1280julia.young@icrinc.comorInvestor Relations:Raphael
Gross, 203-682-8253investor@deltaco.com
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