LAKE FOREST, Calif.--(BUSINESS WIRE)--
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and may be withdrawn at any time prior to the expiration of the Offer to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properly withdrawn prior to the expiration of the Offer to Exchange,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not properly withdrawn.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.

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Source: Del Taco Restaurants, Inc.