Cara minority back higher bid; company going private

Minority shareholders of Cara Operations have backed an $8 a share bid, paving the way for the company to go private.

Minority shareholders of Cara Operations Ltd. have accepted an improved offer from a group who plans to take the food services company private.

The vote Tuesday on the $345 million offer ends a back-and-forth fight that put members of the founding Phelan family on different sides of the dispute.

On Feb. 3, Cara put off a proposed vote on a $7.625 a share offer that appeared doomed to fail. It had been denounced as inadequate by Paul Phelan and rejected by Jarislowsky Fraser, a Montreal investment firm.

Both were very large minority shareholders. The control block is held by Cara Holdings, which is owned by Gail Regan, her sister Rosemary Phelan and their niece Holiday Phelan-Johnson.

Three days after the delayed meeting, Cara Holdings came back with an $8-a-share bid, a premium of 45.5 per cent on the A shares, compared with the market price of $5.50 before Holdings made its first bid.

The higher bid did the trick.

"In a very real sense this is a return to our original structure as Cara, which was founded by the same Phelan family in 1883, did not become a public corporation until 1968," Gabe Tsampalieros, president and CEO, said in a statement.

Cara Operations' wholly owned businesses include Swiss Chalet, Harvey's, Second Cup, Kelsey's Neighborhood Bar & Brill, Montana's Cookhouse, and as a franchisee, Outback Steakhouse restaurants in Eastern Canada.