Click here to view the original press release.
The Keg Royalties Income Fund (the “Fund”) and Fairfax Financial Holdings Limited (“Fairfax”) have announced that they have entered into an arrangement agreement pursuant to which Fairfax has agreed to acquire all of the issued and outstanding units of the Fund, other than those already owned by Fairfax, for a price of C$18.60 per Unit (the “Purchase Price”), payable in cash (the “Transaction”).
The Transaction implies a total enterprise value for the Fund of approximately C$324 million, and a total of C$207 million for the Units not already owned by Fairfax.
The Purchase Price represents a premium of 30.8% to the closing price of the Fund on the Toronto Stock Exchange (“TSX”) on May 2, 2025, the last trading day prior to the announcement of a non-binding letter of intent between the Fund and Fairfax, and a premium of 34.7% to the 20-day volume weighted average price of the Fund on the TSX as of that date.
Kip Woodward, Chairman of the Fund, commented, “the Transaction offers the Fund’s unitholders a substantial premium at a compelling valuation, as well as immediate liquidity. It also provides the Keg business with additional financial flexibility in the hands of a committed, well-capitalized owner with a long-term perspective. We are very pleased to have reached this definitive agreement with Fairfax for our unitholders, following our announcement of the non-binding LOI last month”.
Fort Capital provided an independent formal valuation and independent fairness opinion to the Trustees of the Fund.