Paul David Phelan abandoned his fight to block Cara Operations Ltd. from going private Tuesday, saying he would not vote against the sweetened bid.
“I will not oppose the new proposal. The new price is a significant improvement over the previous proposal and far superior to the original $7.50 per share announced last fall,” Mr. Phelan, a major shareholder of Cara Operations, said in a release.
Mr. Phelan, an opponent of taking the company private, controls 18.4 per cent of the outstanding class A shares or 9.8 per cent of the company - not enough to single-handedly prevent a sale.
Mississauga-based Cara Operations, which owns the Harvey's, Swiss Chalet and Second Cup restaurant chains, as well as an airline catering business, has been embroiled in a family feud since last summer.
Cara Operations is controlled by parent company Cara Holdings Ltd., which is run by Mr. Phelan's sisters Gail Regan and Rosemary Phelan, and their niece Holiday Phelan-Johnson.
Cara Holdings recently increased its offer for the shares it does not already own to $8 apiece, valuing the latest bid at about $343-million. The original going-private offer in August was $7.50 a share, which was increased in December to $7.625.
Cara Holdings owns about 79 per cent of the common shares and 31 per cent of the class A non-voting shares. Together, the company holds a 53.5-per-cent stake in Cara Operations.
On Feb. 5, Cara Holdings announced the group would increase the payment to shareholders to $8. The special meeting will reconvene on Feb. 24 to consider the revised proposal.
“Cara has been an important part of my life and my family's life for generations, so this is more than a straightforward investment decision. Although I will no longer be a shareholder, I am a franchisee and I wish the company, its management, employees and owners the best,” Mr. Phelan said.
