Proxy Advisor Backs A&W Revenue Royalties Income Fund Combination Transaction

A leading proxy advisor has recommended unitholders of A&W Revenue Royalties Income Fund (AW.UN) to vote in favor of the proposed combination transaction with A&W Food Services of Canada Inc. (Food Services). The transaction, announced earlier this year, aims to create a more integrated and efficient business model for the iconic Canadian quick-service restaurant chain.

The proxy advisor cited several strategic benefits of the transaction, including enhanced brand value, improved market positioning, and increased financial stability. By combining the Fund's royalty income with Food Services' operations, the new entity will have a stronger balance sheet and better access to capital, enabling it to pursue growth opportunities and expand into new markets.


The transaction is expected to generate synergies through cost savings, improved supply chain management, and increased marketing effectiveness. These synergies are projected to translate into financial gains for unitholders, with potential increases in distributions and long-term growth in unitholder value.

However, the proxy advisor also acknowledged potential risks and challenges associated with the combination transaction. These include integration risks, regulatory hurdles, and the impact of the transaction on the Fund's exposure to Food Services' financial performance. To mitigate these risks, the Fund and Food Services have put in place a comprehensive integration plan and have engaged with regulatory authorities to ensure a smooth transition.


In conclusion, the recommendation of the leading proxy advisor underscores the strategic merits of the proposed combination transaction between A&W Revenue Royalties Income Fund and A&W Food Services. The transaction is expected to enhance A&W's brand value, market positioning, and financial stability, ultimately benefiting unitholders in the long term. While there are potential risks and challenges, the Fund and Food Services are well-positioned to address these issues and create a more integrated and successful business. Unitholders are encouraged to review the details of the transaction and cast their votes accordingly.