Aragorn and WTF Appoint a Business Valuator

BRAMPTON, ON, Sept. 3, 2015 /CNW/ -  (Franchise Bancorp Inc. - TSX Venture Exchange – FBI) - Edward K. Loyst ("Loyst") and Paul Thomson ("Thomson") announced that Aragorn Holdings Limited ("Aragorn") and WTF Holdings Limited ("WTF") have appointed a chartered business valuator for the purpose of determining the fair market value of shares in Franchise Bancorp Inc. ("FBI") owned by Aragorn.  That fair market value will determine the price at which Aragorn sells those shares to WTF pursuant to the Put Agreement (as defined below).

In September 2009, Aragorn increased its ownership of Teraj International Inc. ("Teraj") from 50% to 100% and Teraj in turn sold 50% of its shares in FBI to WTF. WTF is a company owned by Thomson, the President and a director of FBI; James Walker, a director of FBI and the President of Global Pet Food Stores Inc., a subsidiary of FBI; and Dino Fragaglia, a director of FBI and a Vice-President of Global Pet Food Stores Inc.

Following completion of these transactions, Teraj and WTF each held an equal number of shares in FBI consisting of 2,161,275 (28.32%) common shares each, 65,461.5 (50%) Class A preference shares each and 201,500.5 (31.67%) Class B preference shares each. The preference shares are convertible into common shares on the basis of three common shares for one preference share. If those preference shares were to be converted into common shares, the security holdings of each of Aragorn and WTF would consist of 2,962,161 common shares (being 38.48% of the common shares on a partially diluted basis).

In connection with the 2009 transaction, WTF and Teraj entered into a put agreement (the "Put Agreement") under which Teraj could require WTF to purchase the shares then owned by Teraj (the "Put Shares") for their fair market value at the time the Put Agreement was exercised.  Teraj was required to exercise the Put Agreement no later than September 30, 2014. 

On September 8, 2014, Aragorn (which amalgamated with Teraj in 2013) exercised its right to require the purchase of its shares in FBI under the Put Agreement.  Aragorn and WTF have attempted to agree on the price and terms upon which WTF would purchase the Put Shares but they have been unable to reach an agreement.

The Put Agreement calls for the business valuator to determine the fair market value of the Put Shares within 30 days.

WTF anticipates making a bid for the remainder of the FBI shares upon completion of its acquisition of the Put Shares; and if the price at which WTF acquires the Put Shares is more than 115% of the market price of the FBI Shares, securities laws will require that WTF make a bid for the remainder of the FBI shares at no less than such purchase price.

NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

SOURCE Franchise Bancorp Inc.

For further information: Ted Loyst or Paul Thomson, Tel: 905-790-9023, Fax: 905-790-7059

RELATED LINKS
http://www.franchisebancorp.com

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