Restaurant Brands International Inc. Announces Pricing of Secondary Offering of Common Shares

Rhea-AI Summary

Restaurant Brands International Inc. (QSR) announced the pricing of a secondary offering of up to 6,528,013 common shares by HL1 17 LP, an affiliate of 3G Capital. The offering is related to the exchange of Class B exchangeable partnership units of RBI LP for an equal number of RBI common shares. BofA Securities is acting as the sole book-running manager and has entered into a forward sale agreement with the Selling Shareholder. The offering is expected to close on August 14, 2024, with the settlement of the forward sale agreement and the Exchange occurring on or before August 30, 2024. RBI will not sell any shares or receive proceeds from the offering. The transaction will not change the aggregate number of Exchangeable Units and RBI common shares.

Positive

• No change in the aggregate number of Exchangeable Units and RBI common shares
• RBI will not sell any common shares or receive proceeds, protecting current shareholders from dilution

Negative

• Potential market pressure on QSR stock price due to large secondary offering
• Reduction in 3G Capital's ownership stake in RBI

Insights

Financial Analyst

This secondary offering of 6,528,013 common shares by a major shareholder (3G Capital affiliate) is a neutral event for Restaurant Brands International (RBI). The company itself isn't issuing new shares or raising capital, so there's no dilution for existing shareholders. However, it's worth noting that this represents a significant reduction in 3G Capital's stake, which could be seen as a lack of confidence in RBI's future prospects.

The use of a forward sale agreement is interesting, as it allows the selling shareholder to lock in the current share price while potentially delaying the actual sale. This could indicate they expect the stock price to decline in the near term. For investors, this large block of shares hitting the market might create some short-term downward pressure on the stock price.

Overall, while not directly impacting RBI's operations or financials, this move could affect market sentiment and potentially lead to increased volatility in the short term.

Market Research Analyst

This offering highlights an important trend in the restaurant industry: the gradual exit of private equity firms from their investments. 3G Capital, known for its involvement in major food and beverage companies, is reducing its stake in RBI, which operates popular brands like Burger King and Tim Hortons.

This move could signal that 3G Capital believes RBI has reached a mature stage in its growth cycle. It's important to monitor whether this triggers similar actions from other major shareholders or private equity firms in the sector. If it does, it might indicate a shift in industry dynamics and investment strategies.

For retail investors, it's important to consider the potential implications on RBI's future strategic decisions and growth initiatives, as 3G Capital's influence on the board and management may diminish. This could lead to changes in RBI's aggressive cost-cutting approach, which has been a hallmark of 3G Capital's management style.

TORONTO, Aug. 12, 2024 /PRNewswire/ - Restaurant Brands International Inc. ("RBI" or the "Company") (TSX: QSR) (NYSE: QSR) announced today that an underwritten registered public offering (the "offering") of up to 6,528,013 common shares commenced by HL1 17 LP ("the Selling Shareholder"), an affiliate of 3G Capital Partners Ltd. ("3G Capital"), had priced. These common shares relate to the exchange notice received by Restaurant Brands International Limited Partnership ("RBI LP") from the Selling Shareholder, to exchange 6,528,013 Class B exchangeable limited partnership units of RBI LP (the "Exchangeable Units"). RBI LP intends to satisfy this notice with the delivery of an equal number of common shares of RBI (the "Exchange").

In connection with the offering, the Selling Shareholder entered into a forward sale agreement with BofA Securities (the "forward counterparty") with respect to up to 6,528,013 common shares. In connection with the forward sale agreement, the forward counterparty or its affiliates are expected to borrow and sell through the underwriter 3,528,013 common shares in the offering, and in addition to sell through the underwriter up to 3,000,000 common shares in the offering to the extent a current investor that has indicated an interest in purchasing such shares completes such purchase. The Selling Shareholder is expected to physically settle the forward sale agreement by delivering to the forward counterparty the number of common shares sold in the registered public offering. Upon settlement of the forward sale agreement, the Selling Shareholder will receive, in cash, the public offering price of the aggregate number of RBI common shares sold in the offering, less underwriting discounts and commissions, subject to certain adjustments as provided in the forward sale agreement. The settlement of the forward sale agreement and the Exchange is expected to occur on or before August 30, 2024.

RBI will not sell any common shares in the offering and will not receive any proceeds from the sale of the common shares. The aggregate number of Exchangeable Units and RBI common shares will not change as a result of the transactions.

BofA Securities is acting as sole book-running manager in the offering. BofA Securities may offer the common shares in the offering from time to time in one or more transactions on the New York Stock Exchange, in the over-the-counter market or through negotiated transactions at market prices or at negotiated prices.

The offering is expected to close on August 14, 2024, though a portion of the offering may close at any time prior to settlement of the Exchange, in each case subject to customary closing conditions.

The offering is being made pursuant to an effective shelf registration statement (containing a prospectus) filed with the U.S. Securities & Exchange Commission (the "SEC"). A final prospectus supplement relating to the offering will be filed with the SEC and will be available on the SEC's website at http://www.sec.gov. A copy of the final prospectus supplement and the accompanying prospectus relating to the offering may be obtained by contacting BofA Securities, NC1-022-02-25, 201 North Tryon Street, Charlotte NC 28255-001, Attention: Prospectus Department, or by e-mail at dg.prospectus_requests@bofa.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such state or other jurisdiction. Neither the final prospectus supplement nor the accompanying prospectus relating to the offering constitutes a prospectus under Canadian securities laws and therefore does not qualify the securities offered thereunder in Canada. 

About Restaurant Brands International, Inc.

Restaurant Brands International Inc. is one of the world's largest quick service restaurant companies with over $40 billion in annual system-wide sales and over 30,000 restaurants in more than 120 countries and territories. RBI owns four of the world's most prominent and iconic quick service restaurant brands – TIM HORTONS®, BURGER KING®, POPEYES®, and FIREHOUSE SUBS®. These independently operated brands have been serving their respective guests, franchisees and communities for decades. Through its Restaurant Brands for Good framework, RBI is improving sustainable outcomes related to its food, the planet, and people and communities.

Forward-Looking Statements

This press release includes forward-looking statements, which are often identified by the words "may," "might," "believes," "thinks," "anticipates," "plans," "expects," "intends" or similar expressions and reflect management's expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements include statements about RBI's expectations regarding the exchange of the Exchangeable Units for common shares of the Company. The factors that could cause actual results to differ materially from RBI's expectations are detailed in filings of RBI with the U.S. Securities and Exchange Commission and on SEDAR in Canada, such as its annual and quarterly reports and current reports on Form 8-K. RBI undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date hereof.

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SOURCE Restaurant Brands International Inc.

FAQ

How many shares are being offered in Restaurant Brands International's (QSR) secondary offering?

Up to 6,528,013 common shares of Restaurant Brands International (QSR) are being offered in the secondary offering by HL1 17 LP, an affiliate of 3G Capital.

When is the closing date for Restaurant Brands International's (QSR) secondary offering?

The secondary offering of Restaurant Brands International (QSR) is expected to close on August 14, 2024, subject to customary closing conditions.

Will Restaurant Brands International (QSR) receive any proceeds from this secondary offering?

No, Restaurant Brands International (QSR) will not sell any common shares in the offering and will not receive any proceeds from the sale of the common shares.

Who is the book-running manager for Restaurant Brands International's (QSR) secondary offering?

BofA Securities is acting as the sole book-running manager for Restaurant Brands International's (QSR) secondary offering.