S-4 1 d786007ds4.htm S-4 S-4
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Registration No. 333-            

Registration No. 333-            

 

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

1011773 B.C. UNLIMITED LIABILITY COMPANY

NEW RED CANADA PARTNERSHIP

(Exact name of registrant as specified in its charter)

 

 

 

British Columbia, Canada   4899   Not Applicable

(State or other jurisdiction of

incorporation or organization)

 

(Primary Standard Industrial

Classification Code Number)

 

(I.R.S. Employer

Identification No.)

Ontario, Canada   4899   Not Applicable

(State or other jurisdiction of

incorporation or organization)

 

(Primary Standard Industrial

Classification Code Number)

 

(I.R.S. Employer

Identification No.)

 

 

c/o Burger King Worldwide, Inc.

5505 Blue Lagoon Drive

Miami, FL 33126

(305) 378-3000

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

 

Jill Granat

Senior Vice President, General Counsel and Secretary

c/o Burger King Worldwide, Inc.

5505 Blue Lagoon Drive

Miami, FL 33126

(305) 378-3000

 

 

 

Jill Sutton

Executive Vice President, General

Counsel and Secretary

Tim Hortons Inc.

874 Sinclair Road

Oakville, ON, Canada

(905) 339-6159

 

Stephen Fraidin

William B. Sorabella

David B. Feirstein

Kirkland & Ellis LLP

601 Lexington Avenue

New York, NY 10022

(212) 446-4800

 

Patricia Olasker

Steven Harris

Davies Ward Phillips & Vineberg LLP

155 Wellington Street West

Toronto, Ontario

Canada M5V 3J7

(416) 863-0900

 

Adam O. Emmerich

Gordon S. Moodie

Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, NY 10019

(212) 403-1000

 

Clay Horner

Doug Bryce

Osler, Hoskin & Harcourt LLP

100 King Street West

1 First Canadian Place

Suite 6200, P.O. Box 50

Toronto, Ontario

Canada M5X 1B8

(416) 362-2111

 

 

Approximate date of commencement of proposed sale to the public:

As soon as practicable after this Registration Statement becomes effective and as part of the merger described in the enclosed joint proxy statement/prospectus and management proxy circular.

 

 

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  ¨


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If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, as amended, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer   ¨   (Do not check if a smaller reporting company)    Accelerated filer   ¨
Non-accelerated filer   x      Smaller reporting company   ¨

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ¨

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) ¨

 

 

CALCULATION OF REGISTRATION FEE

 

 

Title of Each Class of

Securities to be Registered

 

Amount

to be

Registered

 

Proposed
Maximum
Offering Price

Per Unit

 

Proposed
Maximum

Aggregate

Offering Price

  Amount of
Registration Fee (1)

Common shares issued by 1011773 B.C. Unlimited Liability Company, without par value (“Holdings common shares”)

  478,007,796   Not Applicable   $14,499,765,413(3)   $1,867,570(4)

Exchangeable Units issued by New Red Limited Partnership (“Partnership exchangeable units”)

  238,525,890   Not Applicable   Not Applicable(3)   Not Applicable(3)

Holdings common shares issuable upon exchange of the Partnership exchangeable units

  (2)   (2)   (2)   (2)

 

 

(1) The registration fee has been calculated pursuant to Rule 457(f) under the Securities Act of 1933, as amended (the “Securities Act”).
(2) The Holdings common shares that are being registered include such indeterminate number of Holdings common shares, if any, that may be issued upon exchange of the Partnership exchangeable units registered hereunder, which Holdings common shares are not subject to an additional fee pursuant to Rule 457(i) of the Securities Act. Pursuant to Rule 416 under the Securities Act, such number of Holdings common shares registered hereby shall include an indeterminate number of Holdings common shares that may be issued in connection with anti-dilution provisions or stock splits, stock dividends, recapitalizations or similar events.
(3) Pursuant to Rule 457(c) and Rule 457(f) under the Securities Act, and solely for the purpose of calculating the registration fee, the market value of the securities to be exchanged was calculated as the sum of (x) the product of (i) 371,533,701 shares of Burger King Worldwide, Inc. (“Burger King Worldwide”) common stock, which are the securities to be cancelled in the merger (including all outstanding shares of Burger King Worldwide common stock and outstanding shares underlying options and restricted stock units), which reflects the maximum number of shares of Burger King Worldwide to be exchanged for Holdings common shares and Partnership exchangeable units and (ii) $31.49, which is the average of the high and low sales prices of a share of Burger King Worldwide common stock on the New York Stock Exchange on September 10, 2014, plus (y) the product of (i) 2,677,999 of Tim Hortons Inc. (“Tim Hortons”) common shares, which are the securities to be cancelled in the arrangement (including all outstanding Tim Hortons common shares and outstanding shares underlying options, performance stock units and restricted stock units), which reflects the maximum number of shares of Tim Hortons to be exchanged for Holdings common shares and (ii) $80.735, which is the average of the high and low sales prices of a Tim Hortons common share on the New York Stock Exchange on September 10, 2014. Pursuant to Rule 457(f)(3) under the Securities Act, the amount of cash that may be payable by Burger King Worldwide in the arrangement has been deducted from the proposed maximum aggregate offering price (computed by multiplying (a) the cash consideration of $59.63 (which is the cash consideration of C$65.50 converted from CAD to USD at a spot exchange rate of 0.9104) per share of Tim Hortons common shares by (b) 2,677,999 which is the estimated maximum number of Tim Hortons common shares that may be cancelled in the arrangement). A separate fee has not been paid for the offering of the Partnership exchangeable units as the issuance of any Partnership exchangeable units will reduce the number of Holdings common shares to be issued.
(4) Determined in accordance with Section 6(b) of the Securities Act at a rate equal to $128.80 per $1,000,000 of the proposed maximum aggregate offering price.

 

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such dates as the Commission, acting pursuant to said Section 8(a), may determine.

 

 

 


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The information contained herein is not complete and may be changed. These securities may not be issued until the registration statement filed with the Securities and Exchange Commission is effective. This joint information statement/circular shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of such securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to appropriate registration or qualification under the securities laws of such jurisdiction.

 

PRELIMINARY INFORMATION STATEMENT/CIRCULAR—SUBJECT TO COMPLETION

DATED SEPTEMBER 16, 2014

 

LOGO    LOGO  

ARRANGEMENT RESOLUTION PROPOSAL—TIM HORTONS SHAREHOLDERS VOTES ARE VERY IMPORTANT

[], 2014

Burger King Worldwide, Inc. (“Burger King Worldwide”) and Tim Hortons Inc. (“Tim Hortons”) announced on August 26, 2014, that they had agreed to a transaction under the terms of the Arrangement Agreement and Plan of Merger (the “arrangement agreement”) by and among Tim Hortons, Burger King Worldwide, 1011773 B.C. Unlimited Liability Company, an unlimited liability company organized under the laws of British Columbia (“Holdings”), New Red Canada Partnership, a general partnership organized under the laws of Ontario and wholly owned subsidiary of Holdings (“Partnership”), Blue Merger Sub, Inc., a corporation incorporated under the laws of Delaware and a wholly owned subsidiary of Partnership (“Merger Sub”), and 8997900 Canada Inc., a corporation organized under the laws of Canada and a wholly owned subsidiary of Partnership (“Amalgamation Sub”).

To effect the transaction, Amalgamation Sub will acquire all of the outstanding shares of Tim Hortons pursuant to a plan of arrangement under Canadian law, which will result in Tim Hortons becoming an indirect subsidiary of both Holdings and Partnership (the “arrangement”). Merger Sub will then merge with and into Burger King Worldwide, with Burger King Worldwide surviving the merger as an indirect subsidiary of both Holdings and Partnership (the “merger” and, together with the arrangement, the “transactions”). Holdings, which will be renamed as mutually agreed between Burger King Worldwide and Tim Hortons and will become a corporation organized under the laws of Canada, will be the general partner of Partnership and own a majority interest (by vote and value) in Partnership which will be represented by common units and preferred units of Partnership which will entitle Holdings to distributions from Partnership that generally correspond to dividends and distributions that are paid by Holdings in respect of common shares and preferred shares of Holdings that are issued and outstanding from time to time. The balance of the partnership units of Partnership will initially be held by former holders of Burger King Worldwide common stock in the form of newly issued Partnership exchangeable units. Partnership will also be renamed as mutually agreed between Burger King Worldwide and Tim Hortons and will become a limited partnership organized under the laws of Ontario.

Tim Hortons must obtain the approval of its shareholders before the arrangement can be completed. We are sending this document to Tim Hortons shareholders to ask them to consider, and if thought advisable, approve with or without variation, a special resolution (the “arrangement resolution”) with respect to the arrangement pursuant to section 192 of the Canada Business Corporations Act (the “CBCA”). Burger King Worldwide’s majority stockholder has already committed to provide its written consent to approve the merger and adopt the arrangement agreement within five business days following the date on which the enclosed document (the “joint information statement/circular”) has been declared effective, which will constitute the only stockholder approval required from holders of Burger King Worldwide common stock. We are sending this document to the other Burger King Worldwide stockholders in order to inform them of such approval and of the transactions.

If the arrangement is completed, each holder of a common share of Tim Hortons will be entitled to receive C$65.50 in cash and 0.8025 newly issued Holdings common shares in exchange for each Tim Hortons common share held by such shareholder. However, Tim Hortons shareholders may make an election to receive cash (a “cash election”), which will entitle such shareholder to receive C$88.50 in cash in exchange for each Tim Hortons common share held by such shareholder, or make an election to receive Holdings common shares (an “arrangement shares election”), which will entitle such shareholder to receive 3.0879 newly issued Holdings common shares in exchange for each Tim Hortons common share held by such shareholder, in each case, subject to proration in accordance with the plan of arrangement as described further in the enclosed document.


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If the merger is completed, each share of Burger King Worldwide common stock outstanding immediately prior to the effective time of the merger will be converted into the right to receive, if no exchangeable election (as described below) has been made with respect to such common stock, 0.99 newly issued Holdings common shares and 0.01 newly issued Partnership exchangeable units, subject to proration as set forth in the arrangement agreement and as described below. A Burger King Worldwide stockholder may make an election to receive consideration solely in the form of Partnership exchangeable units (an “exchangeable election”), which will entitle such stockholder to receive one Partnership exchangeable unit in exchange for each share of Burger King Worldwide common stock, subject to proration as described below. The election to receive the Partnership exchangeable unit consideration will be subject to allocation procedures designed to ensure that the fair market value of Holdings’ interest in Partnership is no less than 50.1% of the fair market value of all equity interests in Partnership as of the date on which the transactions are completed. If exchangeable elections are made by a number of Burger King Worldwide stockholders that would result in such former Burger King Worldwide stockholders owning Partnership exchangeable units that represent more than 49.9% of the fair market value of Partnership, then each Burger King Worldwide stockholder will be entitled to receive Partnership exchangeable units subject to the proration procedures described below.

If the aggregate number of Partnership exchangeable units that would be issued to Burger King Worldwide stockholders after taking into account all exchangeable elections made would represent a value in excess 49.9% of the fair market value of all equity interests in Partnership, then a proration factor will be determined to ensure that Holdings maintains ownership of 50.1% of the fair market value of all equity interests in Partnership as of the date on which the transactions are completed. Each holder of Burger King Worldwide common stock will receive Partnership exchangeable units equal to (a) the number of Partnership exchangeable units such stockholder would have received if no proration were applicable (the “non-prorated exchangeable units”) multiplied by (b) the proration factor. We refer to the number of units a Burger King Worldwide stockholder receives following proration as the “prorated exchangeable units”. Each such stockholder will then receive a number of additional Holdings common shares equal to the difference between the non-prorated exchangeable units and the prorated exchangeable units.

Pursuant to the terms of the limited partnership agreement of Partnership (the “partnership agreement”), each Partnership exchangeable unit will be entitled to distributions from Partnership in an amount equal to any dividends or distributions that are declared and payable in respect of a Holdings common share. Each exchangeable unit holder will also have the benefit of a voting trust agreement (the “voting trust agreement”), pursuant to which a trustee (the “trustee”) will hold a special voting share in Holdings that will entitle the trustee to a number of votes equal to the number of Partnership exchangeable units outstanding, and the holders of Partnership exchangeable units will be able to direct the trustee, as their proxy, to vote on their behalf in substantially all votes that are presented to Holdings common shareholders. From and after the one year anniversary of the completion of the transactions, each holder of a Partnership exchangeable unit will have the right to require Partnership to exchange all or any portion of such holder’s Partnership exchangeable units for, at the election of Partnership, cash (in an amount determined in accordance with the terms of the partnership agreement as described further in the enclosed document) or Holdings common shares, at a ratio of one Holdings common share for each Partnership exchangeable unit. Partnership and the terms of the Partnership exchangeable units are further described in the enclosed document.

Based on the number of Burger King Worldwide and Tim Hortons common shares estimated to be outstanding immediately prior to the completion of the transactions, we estimate that, upon completion, former Tim Hortons shareholders will own approximately 22% of the common equity of the combined company through ownership of Holdings common shares and former Burger King Worldwide stockholders will own approximately 76% of the common equity of the combined company through ownership of both Holdings common shares and Partnership exchangeable units, in each case, on a fully exchanged and fully diluted basis. In connection with the transactions, Berkshire Hathaway Inc. (“Berkshire”) will purchase for an aggregate purchase price of $3,000,000,000 (USD), (a) Class A 9% cumulative compounding perpetual voting preferred shares of Holdings (the “preferred shares”) and (b) a warrant to purchase Holdings common shares (the “warrant”), which shares issuable pursuant to the warrant will represent 1.75% of the fully diluted common shares of Holdings as of the completion of the transactions, at an exercise price per Holdings common share of C$0.01. After taking into account the voting power attributed to the preferred shares, former holders of Burger King Worldwide common stock will control approximately 69% of the voting power of Holdings and former Tim Hortons shareholders will control approximately 21% of the voting power of Holdings.


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Tim Hortons common shares are traded on each of the New York Stock Exchange (the “NYSE”) and the Toronto Stock Exchange (the “TSX”) under the symbol THI, and Burger King Worldwide common stock is traded on the NYSE under the symbol BKW. The parties have agreed that Tim Hortons common shares will delist from the NYSE and the TSX effective following the closing of the arrangement and that Burger King Worldwide common stock will delist from the NYSE effective following the closing of the merger. Holdings will apply to list the Holdings common shares to be issued or made issuable pursuant to the arrangement and the merger on the NYSE and the TSX, and Partnership will apply to list the Partnership exchangeable units to be issued or made issuable pursuant to the merger on the TSX. Listing will be subject to Holdings fulfilling all of the listing requirements of the NYSE and the TSX and Partnership fulfilling all the listing requirements of the TSX.

Tim Hortons is soliciting proxies for use at a special meeting of its shareholders (the “Tim Hortons special meeting”) to consider and vote upon the arrangement resolution.

We cannot complete the arrangement or the merger unless the shareholders of Tim Hortons approve the arrangement resolution. Your vote is very important, regardless of the number of Tim Hortons shares you own. Whether or not you expect to attend the Tim Hortons meeting in person, please vote your shares as promptly as possible so that your shares may be represented and voted at the Tim Hortons meeting.

After careful consideration, the boards of directors of each of Tim Hortons and Burger King Worldwide have unanimously approved the arrangement agreement and the transactions contemplated thereby, including the arrangement and the merger. The Tim Hortons board of directors unanimously recommends that Tim Hortons shareholders vote “FOR” the arrangement resolution to be submitted at the Tim Hortons special meeting.

The joint information statement/circular is a prospectus related to the issuance of Holdings common shares and Partnership exchangeable units in the transactions, a management proxy circular for Tim Hortons to use in soliciting proxies for the Tim Hortons special meeting, and an information statement for those Burger King Worldwide stockholders who have not previously committed to approve by written consent the merger and adopt the arrangement agreement. As stated above, the written consent of Burger King Worldwide’s majority stockholder will constitute the only stockholder approval required from holders of Burger King Worldwide common stock, and no further action on the part of Burger King Worldwide stockholders is required in connection with adopting the arrangement agreement and the merger. We are sending this document to the other Burger King Worldwide stockholders in order to inform them of such approval and of the transactions. The joint information statement/circular is an important document containing answers to frequently asked questions and a summary description of the arrangement and the merger, followed by more detailed information about Tim Hortons, Burger King Worldwide, Holdings, Partnership, the transactions and the arrangement agreement. The obligations of Tim Hortons and Burger King Worldwide to complete the transactions are subject to the satisfaction or waiver of the conditions to closing set forth in the arrangement agreement. You should read this entire joint information statement/circular carefully. In particular, we urge you to read the section entitled “Risk Factors”.

We thank you for your consideration and continued support.

 

Sincerely,

Daniel Schwartz

Chief Executive Officer

Burger King Worldwide, Inc.

 

Marc Caira

President and Chief Executive Officer

Tim Hortons Inc.

Neither the Securities and Exchange Commission nor any state securities commission, nor any securities regulatory authority in Canada, has approved or disapproved of the securities to be issued under this joint information statement/circular or determined that this joint information statement/circular is accurate or complete. Any representation to the contrary is a criminal offense.

This joint information statement/ circular is dated [], 2014, and is being mailed to Tim Hortons shareholders and Burger King Worldwide stockholders on or about [], 2014.


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NOTICE OF SPECIAL MEETING OF TIM HORTONS INC.

NOTICE IS HEREBY GIVEN that, pursuant to an order of the Ontario Superior Court of Justice (Commercial List) dated [], 2014 (the “interim order”), a special meeting (the “special meeting”) of shareholders (the “Tim Hortons shareholders”) of Tim Hortons Inc. (“Tim Hortons”) will be held as follows:

 

When

 

[], 2014

[] [a.m.] (Toronto time)

  Where

 

[]

Toronto, Ontario, Canada

Items of Business

1. To consider, and if thought fit, approve with or without variation, a special resolution (the “arrangement resolution”), the full text of which is set forth in Annex C to the joint information statement/circular of Burger King Worldwide, Inc. (“Burger King Worldwide”) and Tim Hortons (the “joint information statement/circular”) accompanying this notice of meeting and forming part of the joint information statement/circular contemplated by the arrangement agreement and plan of merger (the “arrangement agreement”) between Tim Hortons, Burger King Worldwide, 1011773 B.C. Unlimited Liability Company, New Red Canada Partnership, Blue Merger Sub, Inc. and 8997900 Canada Inc. dated August 26, 2014, a copy of which is included as Annex A to the joint information statement/circular, of Tim Hortons shareholders to approve an arrangement (the “arrangement”) under section 192 of the Canada Business Corporations Act (the “CBCA”), all as more particularly described in the joint information statement/circular, which resolution, to be effective, must be passed by at least two-thirds of the votes cast at the special meeting in person or by proxy by Tim Hortons shareholders; and

2. To transact such further or other business as may properly come before the special meeting and any adjournments or postponements thereof.

Specific details of the matters before the special meeting are set forth in the joint information statement/circular which accompanies this Notice of Special Meeting.

The Tim Hortons board of directors has unanimously approved the arrangement agreement and the transactions contemplated thereby and has determined that the arrangement is fair, from a financial point of view, to Tim Hortons shareholders and is in the best interests of Tim Hortons. For the reasons set forth in the enclosed joint information statement/circular, the Tim Hortons board of directors unanimously recommends that Tim Hortons shareholders vote “FOR” the arrangement resolution.

Registered holders of common shares of Tim Hortons at the close of business on [], 2014, are entitled to vote. Votes of Tim Hortons shareholders are very important, so Tim Hortons shareholders should vote their shares of Tim Hortons even if they cannot attend the special meeting.

Tim Hortons shareholders can vote prior to the special meeting by phone or on the internet, or by completing the enclosed proxy form or voting instruction form as soon as possible. Voting promptly helps reduce the cost of additional proxy solicitation.

The Tim Hortons transfer agent must receive voting instructions from Tim Hortons shareholders before midnight, Toronto time, on [], 2014, the second business day before the special meeting. If the special meeting is postponed or adjourned, the deadline will be before midnight, Toronto time, on the business day before the special meeting is reconvened.

If you, as a Tim Hortons shareholder, hold your shares of Tim Hortons through an intermediary (your bank, broker or other nominee), you are a beneficial shareholder of Tim Hortons and should have received a voting instruction form. You will need to give your voting instructions to your intermediary, so you should allow sufficient time for your intermediary to receive them and submit them to Tim Hortons transfer agent. Each intermediary has its own deadline so Tim Hortons shareholders will need to follow the instructions on the enclosed voting instruction form.


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If you are a Tim Hortons registered shareholder, you can vote your Tim Hortons shares by mail, phone or the internet, or you can attend the special meeting and vote your Tim Hortons shares in person. See “The Tim Hortons Special Meeting of ShareholdersHow to Vote” in the accompanying joint information statement/circular for more information.

Tim Hortons shareholders who are planning to return the form of proxy or voting instruction form are encouraged to review the joint information statement/circular carefully before submitting the applicable form.

Registered shareholders of Tim Hortons are expected to be granted the right to dissent in respect of the arrangement resolution pursuant to the interim order. If the arrangement becomes effective, a registered Tim Hortons shareholder who dissents in respect of the arrangement resolution (each, a “dissenting Tim Hortons shareholder”) is entitled to be paid the fair value of such dissenting Tim Hortons shareholder’s shares, provided that such dissenting Tim Hortons shareholder has delivered a written objection to the arrangement resolution to Tim Hortons not later than 5:00 p.m., Toronto time, on [], 2014, being two business days preceding the special meeting (or, if the special meeting is postponed or adjourned, two business days preceding the date of the postponed or adjourned special meeting) and has otherwise complied strictly with the dissent procedures described in the joint information statement/circular, including the relevant provisions of section 190 of the CBCA, as expected to be modified by the interim order and the plan of arrangement. Beneficial shareholders of Tim Hortons who wish to dissent should be aware that only registered shareholders of Tim Hortons are entitled to dissent. Failure to comply strictly with the dissent procedures described in the joint information statement/circular may result in the loss of any right of dissent. These rights are described in detail in the accompanying joint information statement/circular under the heading “The Transactions—Appraisal / Dissent Rights—Tim Hortons”. The text of section 190 of the CBCA, which will be relevant in any dissent proceeding, is set forth in Annex K to the joint information statement/circular.

All of these items of business will be considered at the special meeting, or at any meeting that is reconvened if the special meeting is postponed or adjourned. Thank you for your continued interest in Tim Hortons.

Jill E. Sutton

Executive Vice President, General Counsel and Secretary

Tim Hortons Inc.

Oakville, Ontario, Canada

[], 2014


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Please note: Tim Hortons proxy materials are also available on the internet

(www.envisionreports.com/THI2014 and www.timhortons-invest.com).

Tim Hortons Inc. Special Meeting of Shareholders

[], 2014

[] a.m. (Toronto time)

Important things to know:

 

    Doors open and check-in begins at [] a.m. (Toronto time).

 

    Admission and seating are on a first-come, first-served basis.

 

    Cameras, mobile phones, recording equipment and other electronic devices are not permitted.

 

    Proof of Tim Hortons share ownership and government-issued photo identification may be required to attend the special meeting.

The special meeting will be broadcast live over the internet beginning at [] a.m. (Toronto time) at www.timhortons-invest.com, and Tim Hortons will archive the webcast on the Tim Hortons website after the special meeting.

Parking/Access for the [] Toronto, Canada

[Map to be included.]

Questions?

Tim Hortons Investor Relations

905.339.4940


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Burger King Worldwide, Inc.

5505 Blue Lagoon Drive

Miami, Florida 33126

NOTICE OF APPROVAL GIVEN BY BURGER KING WORLDWIDE STOCKHOLDERS AND ACTION TO BE TAKEN BY BURGER KING WORLDWIDE

To the Stockholders of Burger King Worldwide, Inc.:

BURGER KING WORLDWIDE, INC. IS NOT ASKING YOU FOR YOUR PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY. THE ACTIONS DESCRIBED BELOW WILL BE APPROVED BY WRITTEN CONSENT OF THE HOLDER OF A MAJORITY OF BURGER KING WORLDWIDE, INC.’S OUTSTANDING SHARES OF COMMON STOCK WITHIN FIVE BUSINESS DAYS AFTER THE REGISTRATION STATEMENT OF WHICH THIS JOINT INFORMATION STATEMENT/CIRCULAR IS A PART HAS BEEN DECLARED EFFECTIVE, PURSUANT TO THE TERMS OF A VOTING AGREEMENT ENTERED INTO ON AUGUST 26, 2014, BY AND AMONG TIM HORTONS INC. AND THE HOLDER OF A MAJORITY OF BURGER KING WORLDWIDE, INC.’S OUTSTANDING SHARES OF COMMON STOCK (THE “VOTING AGREEMENT”). A VOTE OF THE REMAINING STOCKHOLDERS WILL NOT BE NECESSARY.

This joint information statement/circular is being furnished in connection with the Arrangement Agreement and Plan of Merger, dated as of August 26, 2014 (the “arrangement agreement”), by and among Tim Hortons Inc., a corporation organized under the laws of Canada (“Tim Hortons”), Burger King Worldwide, Inc. (“Burger King Worldwide”), 1011773 B.C. Unlimited Liability Company, an unlimited liability company organized under the laws of British Columbia (“Holdings”), New Red Canada Partnership, a general partnership organized under the laws of Ontario whose partnership interests are held either directly or indirectly by Holdings (“Partnership”), Blue Merger Sub, Inc., a corporation incorporated under the laws of Delaware and a wholly owned subsidiary of Partnership (“Merger Sub”), and 8997900 Canada Inc., a corporation organized under the laws of Canada and a wholly owned subsidiary of Partnership (“Amalgamation Sub”), as such agreement may be amended from time to time.

If Tim Hortons shareholders approve and adopt the arrangement resolution relating to the arrangement agreement and plan of arrangement and the arrangement and the merger are subsequently completed, Amalgamation Sub will acquire Tim Hortons pursuant to a plan of arrangement under Canadian law (the “arrangement”) and Merger Sub will merge with and into Burger King Worldwide, with Burger King Worldwide as the surviving corporation in the merger (the “merger” and, together with the arrangement, the “transactions”). The merger will become effective immediately following the effectiveness of the arrangement, to the fullest extent possible.

At the effective time of the merger, each share of Burger King Worldwide common stock outstanding immediately prior to the effective time of the merger will be converted into the right to receive 0.99 newly issued Holdings common shares and 0.01 newly issued Partnership exchangeable units, subject to proration as set forth in the arrangement agreement and described below. However, a holder of Burger King Worldwide common stock may elect to receive consideration solely in the form of Partnership exchangeable units, in which case each share of Burger King Worldwide common stock for which such election was made will be converted into the right to receive one Partnership exchangeable unit in exchange for each share of Burger King Worldwide common stock, subject to proration as set forth in the arrangement agreement and described below. The election to receive the exchangeable unit consideration will be subject to allocation procedures designed to ensure that the fair market value of Holdings’ interest in Partnership is no less than 50.1% of the fair market value of all equity interests in Partnership as of the date on which the transactions are completed. If the aggregate number of Partnership exchangeable units that would be issued to Burger King Worldwide stockholders after taking into account all exchangeable elections made would represent a value in excess 49.9% of the fair market value of all equity interests in Partnership, then a proration factor will be determined to ensure that Holdings maintains ownership of 50.1% of the fair market value of Partnership as of the date on which the transactions are completed. Each


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holder of Burger King Worldwide common stock will receive Partnership exchangeable units equal to (a) the number of exchangeable units such stockholder would have received if no proration were applicable (the “non-prorated exchangeable units”) multiplied by (b) the proration factor. We refer to the number of units a Burger King Worldwide stockholder receives following proration as the “prorated exchangeable units”. Each such stockholder will then receive a number of additional Holdings common shares equal to the difference between the non-prorated exchangeable units and the prorated exchangeable units.

Adoption of the arrangement agreement and approval of the merger by the holders of a majority of the outstanding shares of Burger King Worldwide common stock is required by the General Corporation Law of the State of Delaware (the “DGCL”). However, pursuant to the voting agreement, within five business days after the registration statement of which this joint information statement/circular is a part has been declared effective, 3G Special Situations Fund II, L.P., which currently owns 69.22% of the outstanding shares of Burger King Worldwide common stock, will execute a written consent in the form attached hereto as Annex J adopting the arrangement agreement and approving the merger. Therefore, no further action on the part of Burger King Worldwide stockholders is required in connection with adopting the arrangement agreement and the merger. However, pursuant to the requirements of section 14(c) of the Securities Exchange Act of 1934 and section 228(d) of the DGCL, Burger King Worldwide is required to send to its stockholders a written information statement, which is satisfied by delivery of this document, at least 20 calendar days prior to the date upon which the merger can occur. This document is being mailed on or about [], 2014, to holders of record as of [], 2014, of shares of Burger King Worldwide common stock.

By Order of the board of directors,

Jill Granat

Senior Vice President, General Counsel and Secretary

[], 2014


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ABOUT THIS JOINT INFORMATION STATEMENT/CIRCULAR

References to this “joint information statement/circular” mean this joint information statement/circular, which forms part of a registration statement on Form S-4 filed with the U.S. Securities and Exchange Commission (the “SEC”) by Holdings and Partnership, constitutes a prospectus of Holdings and Partnership under section 5 of the Securities Act of 1933, as amended (the “Securities Act”), with respect to the common shares of Holdings (the “Holdings common shares”) and exchangeable units of Partnership to be issued or that are issuable pursuant to the transactions. This joint information statement/circular also constitutes an information statement of Burger King Worldwide under section 14(c) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), a management proxy circular of Tim Hortons under National Instrument 51-102 Continuous Disclosure Obligations (“NI 51-102”) of the Canadian Securities Administrators (the “CSA”) and a management proxy circular of Tim Hortons under section 150 of the Canada Business Corporations Act (the “CBCA”). This joint information statement/circular accompanies a notice of meeting with respect to the special meeting of Tim Hortons shareholders (the “Tim Hortons Special Meeting”) and a notice of action taken by written consent of Burger King Worldwide stockholders.

You should rely only on the information contained in or incorporated by reference into this joint information statement/circular. No one has been authorized to provide you with information that is different from the information contained in, or incorporated by reference into, this joint information statement/circular. This joint information statement/circular is dated [], 2014. You should not assume that the information contained in this joint information statement/circular is accurate as of any date other than that date. None of the mailing of this joint information statement/circular to Burger King Worldwide stockholders and Tim Hortons shareholders and the issuance by Holdings of common shares or, the issuance by Partnership of exchangeable units necessary to effect the transactions as contemplated by the arrangement agreement will create any implication to the contrary. For greater certainty, to the extent that any information provided on the website of Tim Hortons or Burger King Worldwide or by Tim Hortons exchange agent acting in connection with the arrangement (the “arrangement exchange agent”) or Burger King Worldwide’s exchange agent acting in connection with the merger (the “merger exchange agent”) is inconsistent with this joint information statement/circular, you should rely on the information provided in this joint information statement/circular.

This joint information statement/circular does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation. Information incorporated by reference or contained in this joint information statement/circular regarding Burger King Worldwide has been provided by Burger King Worldwide, and information incorporated by reference or contained in this joint information statement/circular regarding Tim Hortons has been provided by Tim Hortons. Although neither Tim Hortons nor Burger King Worldwide has any knowledge that would indicate that any statements contained herein taken from or based upon such information provided by the other is untrue or incomplete, neither Tim Hortons nor Burger King Worldwide assumes any responsibility for the accuracy or completeness of such information, or for any failure by the other company, any of its affiliates or any of their respective representatives to disclose events which may have occurred or may affect the significance or accuracy of any such information but which are unknown by Burger King Worldwide or Tim Hortons, as applicable. In accordance with the arrangement agreement, each of Burger King Worldwide and Tim Hortons agreed to provide all necessary information that is required by law to be included in this joint information statement/circular and ensure that such information does not contain any misrepresentation.

Neither Tim Hortons shareholders nor Burger King Worldwide stockholders should construe the contents of this joint information statement/circular as legal, tax or financial advice and should consult with their own legal, tax, financial or other professional advisors.

All summaries of, and references to, the agreements governing the terms of the transactions in this joint information statement/circular are qualified in their entirety by the copies of and complete text of such agreements in the forms attached hereto as Annexes and available on the System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com, and the SEC website of Electronic Data Gathering Analysis and Retrieval System (“EDGAR”) at www.sec.gov.


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Neither the SEC nor any state securities commission, nor any securities regulatory authority in Canada, has approved or disapproved of the securities to be issued under this joint information statement/circular or determined that this joint information statement/circular is accurate or complete. Any representation to the contrary is a criminal offense.

Other Important Information About This Joint Information Statement/Circular

Complying with Laws and Regulations

Tim Hortons is a corporation incorporated under the CBCA and qualifies as a foreign private issuer in the United States for purposes of the Exchange Act. Although not required to do so as a foreign private issuer in the United States, Tim Hortons continues to file annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K with the SEC instead of filing the reports available to foreign private issuers. All of these reports are available through the at www.sedar.com and on EDGAR at www.sec.gov.

Tim Hortons complies with the spirit of the U.S. proxy rules whenever possible and as long as they do not conflict with corporate or securities disclosure requirements in Canada. As a Canadian corporation and foreign private issuer in the United States, Tim Hortons is not subject to the requirements of Section 14(a) of the Exchange Act or Regulation 14A. Tim Hortons has, therefore, prepared the management proxy circular forming part of this joint information statement/circular in accordance with Canadian corporate and securities law requirements, which in most respects are substantially similar to the U.S. securities rules governing disclosure requirements. The information that Tim Hortons makes available on SEDAR is not a part of, or incorporated by reference into, the registration statement of which this joint information statement/circular forms a part.


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TABLE OF CONTENTS

 

     Page  

SUMMARY

     1   

The Arrangement Agreement, Plan of Arrangement and the Transactions

     1   

RISK FACTORS

     26   

Factors Relating to the Transactions

     26   

Additional Factors Relating to Holdings Common Shares

     38   

Additional Factors Relating to Partnership Exchangeable Units

     39   

Additional Factors Relating to Burger King Worldwide and Tim Hortons

     46   

Additional Factors Relating to the Businesses of Tim Hortons and Burger King Worldwide

     46   

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

     47   

THE COMPANIES

     49   

Description of Burger King Worldwide Parties

     49   

Business of Burger King Worldwide

     50   

Burger King Worldwide’s Industry

     50   

Burger King Worldwide’s Business Strategy

     50   

Description of Tim Hortons

     51   

Business of Tim Hortons

     51   

FINANCIAL INFORMATION

     53   

Selected Historical Consolidated Financial Data of Burger King Worldwide

     53   

Selected Historical Consolidated Financial Data of Tim Hortons

     56   

 

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TABLE OF CONTENTS (CONTINUED)

 

     Page  

Management’s Discussion and Analysis of Financial Condition and Results of Operations of Burger King Worldwide

     57   

Management’s Discussion and Analysis of Financial Condition and Results of Operations of Tim Hortons

     57   

Unaudited Pro Forma Condensed Combined Financial Information

     57   

Comparative Per Share Data

     61   

Comparative Per Share Market Price Data and Dividend Information

     62   

THE TIM HORTONS SPECIAL MEETING OF SHAREHOLDERS

     66   

The Arrangement Resolution

     66   

Required Vote

     66   

Board Recommendation

     66   

Who Can Vote

     66   

Shareholders of Record

     66   

Beneficial Shareholders

     66   

Principal Shareholders

     67   

Delivery of Materials

     68   

How to Vote

     68   

Voting by Proxy

     68   

Registered Shareholders of Tim Hortons

     69   

Beneficial Shareholders of Tim Hortons

     69   

About Abstentions and Broker Non-Votes

     71   

Confidentiality

     71   

ARRANGEMENT RESOLUTION SUBMITTED TO TIM HORTONS SHAREHOLDERS

  

BENEFICIAL STOCK OWNERSHIP OF COMPANY’S INSIDERS

     72   

Voting Securities and their Principal Holders

     72   

Security Ownership of Management/Directors

     73   

Ownership of Deferred Stock Units by Directors

     74   

THE TRANSACTIONS

     77   

Effect of the Transactions

     77   

Background of the Transactions

     80   

Recommendation of Tim Hortons Board of Directors; Tim Hortons Reasons for the Arrangement

     92   

Burger King Worldwide’s Reasons for the Merger

     96   

Opinions of Tim Hortons Financial Advisors

     98   

Opinion of Burger King Worldwide’s Financial Advisor

     111   

Interests of Certain Persons related to Tim Hortons in the Transactions

     122   

Interests of Certain Persons related to Burger King Worldwide in the Transactions

     128   

The Written Consent of Certain Burger King Worldwide Stockholders

     129   

Appraisal / Dissent Rights

     129   

Regulatory Approvals Required

     131   

Court Approval of the Arrangement

     134   

Stock Exchange Listing of Holdings Common Shares and Partnership Exchangeable Units; Deregistration of Burger King Worldwide and Tim Hortons Common Stock after the Transactions

     134   

Description of Preliminary Steps prior to the Arrangement

     135   

Election and Proration Procedures; Procedures for Converting Tim Hortons Common Shares into Arrangement Consideration; Dissenter’s Rights; Withholding Rights

     135   

Election and Proration Procedures; Exchange of Shares of Burger King Worldwide Common Stock

     140   

 

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TABLE OF CONTENTS (CONTINUED)

 

     Page  

Distributions with respect to Unexchanged Tim Hortons Common Shares and Burger King Worldwide Common Stock

     144   

Fractional Shares

     144   

Lost, Stolen or Destroyed Certificates

     144   

Financing for the Transactions

     145   

Litigation Related to the Transactions

     147   

Accounting Treatment of the Transactions

     147   

Material Tax Considerations for the Transactions

     147   

Material U.S. Federal Income Tax Considerations

     147   

U.S. Tax Residence of Holdings and Partnership

     149   

Material U.S. Federal Income Tax Considerations for the Arrangement

     152   

Material U.S. Federal Income Tax Considerations for the Merger

     154   

Tim Hortons, Burger King Worldwide and Holdings

     157   

Material U.S. Federal Income Tax Considerations for U.S. Holders of Holdings Common Shares or Partnership Units

     157   

Material U.S. Federal Income Tax Considerations for Non-U.S. Holders

     166   

Information Reporting and Backup Withholding

     169   

Material Canadian Federal Income Tax Consequences of the Transactions

     169   

Canadian Securities Laws

     182   

THE ARRANGEMENT AGREEMENT

     184   

Closing of the Arrangement and the Merger

     184   

Merger Consideration to Burger King Worldwide Stockholders

     185   

Arrangement Consideration to Tim Hortons Shareholders

     185   

Treatment of Outstanding Burger King Worldwide Equity Awards

     186   

Burger King Worldwide Bonus Swap Program

     186   

Treatment of Outstanding Tim Hortons Equity Awards

     186   

Governing Documents Following the Arrangement and the Merger

     187   

Exchange of Burger King Worldwide Stock Certificates Following the Merger

     187   

Representations and Warranties

     188   

Material Adverse Effect

     190   

Covenants

     191   

Board Recommendations; Burger King Worldwide Written Consent and Tim Hortons Special Meeting

     196   

Third Party Acquisition Proposals

     196   

Regulatory Approvals

     199   

Additional Agreements

     200   

Employee Matters

     200   

Financing Covenant

     201   

Indemnification

     204   

Brand Headquarters and Names of Burger King Worldwide and Tim Hortons

     204   

Officers and Directors upon Completion of the Merger

     204   

Conditions to the Completion of the Arrangement and the Merger

     204   

Termination of the Arrangement Agreement

     207   

Termination Fees

     207   

Effect of Termination

     208   

Expenses

     208   

Amendment

     209   

Governing Law

     209   

Injunctive Relief

     209   

 

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TABLE OF CONTENTS (CONTINUED)

 

     Page  

THE PLAN OF ARRANGEMENT

     210   

Plan Steps

     210   

Pre-Effective Time Procedures

     212   

Amendments to the Plan

     212   

Paramountcy

     213   

LOCK-UP AGREEMENTS OF TIM HORTONS DIRECTORS

     214   

Restrictions on Tim Hortons Shares held by the Tim Hortons Directors

     214   

Termination of the Lock-Up Agreements

     214   

BURGER KING WORLDWIDE SHAREHOLDER VOTING AGREEMENT AND WRITTEN CONSENT OF CERTAIN BURGER KING WORLDWIDE STOCKHOLDERS

     215   

POST-TRANSACTIONS ORGANIZATIONAL STRUCTURE

     216   

Organizational Structure

     216   

Corporate Governance and Management of Holdings

     217   

Corporate Governance of Partnership

     221   

Partnership Agreement

     221   

Description of Holdings Share Capital

     229   

Description of the Partnership Exchangeable Units

     234   

Consolidated Capitalization of Holdings and Partnership

     259   

MARKET PRICE AND DIVIDEND DATA OF BURGER KING WORLDWIDE AND TIM HORTONS

     260   

COMPARISON OF RIGHTS OF HOLDERS OF BURGER KING WORLDWIDE COMMON STOCK, HOLDINGS COMMON SHARES AND PARTNERSHIP EXCHANGEABLE UNITS

     263   

COMPARISON OF RIGHTS OF TIM HORTONS SHAREHOLDERS AND HOLDINGS SHAREHOLDERS

     287   

LEGAL MATTERS

     229   

INDEBTEDNESS OF DIRECTORS AND OFFICERS

     300   

AUDITORS, TRANSFER AGENTS AND REGISTRARS

     301   

MATERIAL CONTRACTS

     301   

EXPERTS

     302   

Burger King Worldwide

     302   

Tim Hortons

     302   

LEGAL PROCEEDINGS

     302   

REGULATORY ACTIONS

     303   

ENFORCEABILITY OF CIVIL LIABILITIES

     304   

HOUSEHOLDING OF JOINT INFORMATION STATEMENT/CIRCULAR

     305   

SHAREHOLDER PROPOSALS

     306   

Burger King Worldwide

     306   

Tim Hortons

     306   

WHERE YOU CAN FIND MORE INFORMATION

     307   

Tim Hortons

     307   

Burger King Worldwide

     307   

Approval by the Burger King Worldwide and Tim Hortons Boards of Directors

     308   

ANNEXES

  

Annex A—Arrangement Agreement

  

Annex B—Form of Plan of Arrangement

  

Annex C—Arrangement Resolution

  

Annex D—Form of Articles of Amendment of Holdings

  

Annex E—Form of Amended & Restated By-Law No. 1 of Holding

  

Annex F—Form of Partnership Agreement

  

 

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TABLE OF CONTENTS (CONTINUED)

 

     Page  

Annex G—Opinion of Citigroup Global Markets Inc.

  

Annex H—Opinion of RBC Dominion Securities Inc.

  

Annex I—Opinion of Lazard Frères & Co. LLC

  

Annex J—Form of Burger King Worldwide Stockholder Written Consent

  

Annex K—Section 190 of the CBCA

  

PART II INFORMATION NOT REQUIRED IN THE PROSPECTUS

     II-1   

Item 20. Indemnification of Directors and Officers

     II-1   

Item 21. Exhibits and Financial Statement Schedules

     II-3   

Item 22. Undertakings.

     II-4   

 

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QUESTIONS AND ANSWERS ABOUT THE TRANSACTIONS

AND THE TIM HORTONS SPECIAL MEETING

Set forth below are questions that you, as a shareholder of Tim Hortons or a stockholder of Burger King Worldwide, may have regarding the transactions and the other matters to be considered at the Tim Hortons special meeting or the other matters that will be approved via written consent by stockholders of Burger King Worldwide and the answers to those questions. Tim Hortons and Burger King Worldwide urge you to read carefully the remainder of this joint information statement/circular as the information in this section does not provide all the information that might be important to you with respect to the arrangement and the merger and the other matters to be considered at the Tim Hortons special meeting or which will be approved by written consent of Burger King Worldwide stockholders. Additional important information is also contained in the Annexes to, and the documents incorporated by reference into, this joint information statement/circular. All references in this joint information statement/circular to “Tim Hortons” refer to Tim Hortons Inc., a Canadian corporation; all references in this joint information statement/circular to “Burger King Worldwide” refer to Burger King Worldwide, Inc., a Delaware corporation; and all references to the “arrangement agreement” refer to the Arrangement Agreement and Plan of Merger, dated as of August 26, 2014, among Tim Hortons, Burger King Worldwide, 1011773 B.C. Unlimited Liability Company, an unlimited liability company organized under the laws of British Columbia (“Holdings”), New Red Canada Partnership, a general partnership organized under the laws of Ontario whose partnership interests are held either directly or indirectly by Holdings (“Partnership”), Blue Merger Sub, Inc., a corporation incorporated under the laws of Delaware and a wholly owned subsidiary of Partnership (“Merger Sub”), and 8997900 Canada Inc., a corporation organized under the laws of Canada and a wholly owned subsidiary of Partnership (“Amalgamation Sub”), a copy of which is included as Annex A to this joint information statement/circular. Holdings, which is expected to be renamed in connection with the completion of the transactions and continued as a corporation under the laws of Canada, is sometimes referred to in this joint information statement/circular as the “combined company”; unless otherwise indicated or as the context requires, all references in this joint information statement/circular to “we,” “our” and “us” refer to Holdings as the combined company following the completion of the transactions. All references to USD or $ are to United States dollars, and all references to C$ are to Canadian dollars.

General Questions and Answers

Q: What is the proposed transaction?

A: Tim Hortons and Burger King Worldwide have agreed to a transaction pursuant to the terms of the arrangement agreement. To effect the transaction, Amalgamation Sub will acquire all of the issued and outstanding Tim Hortons common shares pursuant to a plan of arrangement under Canadian law, which will result in Tim Hortons becoming an indirect subsidiary of Holdings and Partnership.

Merger Sub will then merge with and into Burger King Worldwide, with Burger King Worldwide as the surviving corporation in the merger. Burger King Worldwide will survive as an indirect subsidiary of both Holdings and Partnership.

Holdings will be renamed prior to the closing and will become a corporation organized under the laws of Canada. Holdings will act as the general partner of Partnership and will own a majority interest in Partnership represented by Class A common partnership units (“common units”) and preferred units of Partnership (“preferred units”), which will entitle Holdings to distributions from Partnership that generally correspond to dividends and distributions that are paid by Holdings in respect of common shares and Class A 9% cumulative compounding perpetual voting preferred shares of Holdings (the “preferred shares”) of Holdings that are issued and outstanding from time to time. The balance of the partnership units of Partnership initially being held in the form of Partnership exchangeable units by the former holders of Burger King Worldwide common stock.

 

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Q: Has the Tim Hortons board of directors unanimously approved the arrangement?

A: Yes. Following consultation with Tim Hortons senior management and with legal, financial and other advisors, the review of a significant amount of information and consideration of a number of factors (including the interest of all affected stakeholders), the Tim Hortons board of directors has unanimously determined that the arrangement is in the best interest of Tim Hortons.

Q: Does the Tim Hortons board of directors recommend that I vote “FOR” the arrangement resolution?

A: Yes. The Tim Hortons board of directors recommends that Tim Hortons shareholders vote “FOR” the resolution of Tim Hortons shareholders, the full text of which is set forth in Annex C to this joint information statement/circular, referred to as the “arrangement resolution”, to approve an arrangement under section 192 of the CBCA, at the Tim Hortons special meeting.

Q: What are Tim Hortons reasons for the arrangement?

A: In evaluating the arrangement, the Tim Hortons board of directors consulted with Tim Hortons senior management and with legal, financial and other advisors, reviewed a significant amount of information and considered a number of factors and concluded in its business judgment that the arrangement is expected to maintain the strong position of Tim Hortons and to enhance its future strategic opportunities and that, considering the interests of all affected stakeholders, the arrangement is in the best interest of Tim Hortons. For a more complete discussion of these reasons, see “The Transactions—Recommendation of Tim Hortons Board of Directors; Tim Hortons Reasons for the Arrangement.

In considering the recommendation of the Tim Hortons board of directors, you should be aware that directors and executive officers of Tim Hortons have interests in the proposed transaction that are in addition to, or different from, any interests they might have as shareholders. See “The Transaction—Interests of Certain Persons related to Tim Hortons in the Transactions”.

Q: What percentage of the outstanding Holdings common shares will Tim Hortons and Burger King Worldwide stockholders own following the transactions?

A: Based on the number of shares of Burger King Worldwide common stock and the number of Tim Hortons common shares estimated to be outstanding immediately prior to the completion of the transactions, we estimate that, upon the completion, former Tim Hortons shareholders will own approximately 22% of the common equity of the combined company through ownership of Holdings common shares and former Burger King Worldwide stockholders will own approximately 76% of the common equity of the combined company through ownership of both Holdings common shares and exchangeable units of Partnership, in each case, on a fully exchanged and fully diluted basis.

Burger King Worldwide’s largest stockholder, 3G Special Situations Fund II, L.P., which we refer to as “3G”, will own approximately 51% of the common equity of the combined company through ownership of both Holdings common shares and Partnership exchangeable units. This ownership will represent approximately 48% of the total voting power of Holdings voting shares.

In connection with the transactions, Berkshire Hathaway Inc. (“Berkshire”) will purchase, for an aggregate purchase price of $3.0 billion, (a) the preferred shares and (b) a warrant to purchase common shares (the “warrant”), which will represent 1.75% of the fully-diluted Holdings common shares as of the completion of the transactions at an exercise price per Holdings common share of C$0.01. After taking into account the voting power attributed to the preferred shares, former holders of Burger King Worldwide common stock will control approximately 69% of the voting power of Holdings and former Tim Hortons shareholders will control approximately 21% of the voting power of Holdings. See “Post-Transactions Organizational Structure—Description of Holdings Share Capital.”

 

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Q: When do you expect the transactions to be completed?

A: Tim Hortons and Burger King Worldwide are working to complete the transactions before the end of 2014. However, the transactions are subject to the approval of the arrangement resolution by the required vote of Tim Hortons shareholders, the approval of the Ontario Superior Court of Justice (Commercial List), which is referred to in this joint information statement/circular as the “Ontario court”, the approval of the listing of the Holdings common shares and Partnership exchangeable units, as well as the obtaining of approval under the Investment Canada Act, as amended, including the regulations promulgated thereunder (which we refer to in this joint information statement/circular as the “Investment Canada Act”) and other regulatory and third party approvals and other conditions, and it is possible that factors outside the control of both companies could result in the transactions being completed at a later time, or not at all. See “The Arrangement Agreement—Conditions to the Completion of the Arrangement and the Merger” and “Risk Factors”. Tim Hortons and Burger King Worldwide hope to complete the transactions as soon as reasonably practicable.

Q: What happens if the transactions are not completed?

A: If the transactions are not completed, neither Burger King Worldwide stockholders nor Tim Hortons shareholders will receive any consideration for their shares of Burger King Worldwide common stock or Tim Hortons common shares, as applicable. Instead, both Burger King Worldwide and Tim Hortons will remain independent public companies; Burger King Worldwide common stock will continue to be listed and traded on the New York Stock Exchange (the “NYSE”) and Tim Hortons common shares will continue to be listed and traded on the NYSE and Toronto Stock Exchange (the “TSX”). Under specified circumstances, Burger King Worldwide or Tim Hortons may be required to pay a fee to Tim Hortons or Burger King Worldwide, respectively, with respect to the termination of the arrangement agreement. In addition, in the event the arrangement agreement is terminated because Tim Hortons shareholders do not approve the arrangement resolution, Tim Hortons may be required to pay to Burger King Worldwide a termination fee in an amount of C$40 million. The termination fees are described in more detail under “The Arrangement Agreement—Termination of the Arrangement Agreement”.

Q: What is required to complete the transactions?

A: The obligations of Tim Hortons and Burger King Worldwide to consummate the arrangement, the merger and the other transactions contemplated by the arrangement agreement are subject to certain conditions, including conditions with respect to approval of the arrangement resolution by Tim Hortons shareholders; approval by the Ontario court; accuracy of representations and warranties of the other party to the applicable standard provided by the arrangement agreement; no fact, circumstance, change, effect or event occurring that had or would reasonably be expected to have a material adverse effect on Tim Hortons or Burger King Worldwide; compliance by the other party with its covenants in the arrangement agreement in all material respects; all required regulatory approvals being obtained and remaining in full force and effect and applicable waiting or suspensory periods relating to the required regulatory approvals having expired or been terminated, in each case without the imposition of a restraint; the approval of the NYSE for listing (subject only to official notice of issuance) and the conditional approval by the TSX (subject only to customary listing conditions) of the Holdings common shares to be issued in the merger and the arrangement; the conditional approval by the TSX (subject only to customary listing conditions) of Partnership exchangeable units to be issued in the merger; and the effectiveness of the registration statement of which this joint information statement/circular forms a part, as well as other customary closing conditions. The only condition to the closing of the merger is the closing of the arrangement. Accordingly, if the arrangement is completed, the parties will also be obligated to consummate the merger. See “The Arrangement Agreement—Conditions to the Completion of the Arrangement and the Merger.”

Q: What will be the relationship between Holdings, Partnership, Burger King Worldwide and Tim Hortons after the transactions?

A: Burger King Worldwide and Tim Hortons will both survive the transactions as indirect subsidiaries of Partnership and Holdings. Holdings will act as the general partner of Partnership and will own a majority interest (by vote and value) in Partnership represented by common units and preferred units of Partnership which will

 

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entitle Holdings to distributions from Partnership that generally correspond to dividends and distributions that are paid by Holdings in respect of common shares and preferred shares of Holdings that are issued and outstanding from time to time. The balance of the partnership units of Partnership will initially be held by the former holders of Burger King Worldwide common stock in the form of newly issued Partnership exchangeable units.

Questions and Answers for Burger King Worldwide Stockholders

Q: Why am I receiving this joint information statement/circular?

A: This document is also an information statement which is being delivered to Burger King Worldwide stockholders. In order to complete the merger, Burger King Worldwide stockholders must adopt the arrangement agreement and approve the transactions contemplated thereby. A Burger King Worldwide stockholder, 3G Capital, which owns a sufficient number of shares of Burger King Worldwide common stock, has entered into a voting agreement with Tim Hortons, which we refer to as the “voting agreement”, pursuant to which 3G Capital committed to deliver a written consent adopting the arrangement agreement and approving the transactions. A form of the written consent to be delivered by 3G Capital is attached to this joint information statement/circular as Annex J (the “3G written consent”). At the time the 3G written consent is delivered, it will constitute the only Burger King Worldwide stockholder approval required to approve the merger and adopt the arrangement agreement. Accordingly, your vote is not required and Burger King Worldwide is not asking you for a proxy. However, applicable provisions of Delaware law and certain securities regulations require us to provide you with information regarding the merger even though your vote or consent is neither required nor requested to adopt the arrangement agreement or complete the transactions contemplated thereby, including the merger.

Q: Is the approval of Burger King Worldwide stockholders necessary to adopt the merger? Why am I not being asked to vote on the merger?

A: Delaware law and Burger King Worldwide’s organizational documents allow Burger King Worldwide’s stockholders to act by written consent instead of holding a meeting. At the time the 3G written consent is delivered, a sufficient number of Burger King Worldwide stockholders will have approved the merger and adopted the arrangement agreement. Therefore, Burger King Worldwide will not need to hold a special meeting and no vote is required on your part. We are not asking you for a proxy, and you are requested not to send us a proxy. You will, however, be able to make an election to receive only Partnership exchangeable units in the merger if you so choose, subject to proration as provided in the arrangement agreement and as described below.

Q: What will I receive in the merger?

A: At the effective time of the merger, each share of Burger King Worldwide common stock outstanding immediately prior to the effective time of the merger will be converted into the right to receive 0.99 newly issued Holdings common shares and 0.01 newly issued Partnership exchangeable units, subject to proration as provided in the arrangement agreement and as described in this joint information statement/circular.

A Burger King Worldwide stockholder may, however, make an election to receive consideration solely in the form of Partnership exchangeable units (which we refer to as an “exchangeable election”), in which case each share of Burger King Worldwide common stock for which such election has been made will be converted into the right to receive one Partnership exchangeable unit, subject to proration as provided in the arrangement agreement and as described in this joint information statement/circular.

For additional information regarding the election and proration procedures see “The Transactions—Election and Proration Procedures; Exchange of Shares of Burger King Worldwide Common Stock.” We refer to the right to receive a mix of Holdings common shares and Partnership exchangeable units in connection with the merger as the “Holdings consideration” in this joint information statement/circular. We refer to the right of a Burger

 

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King Worldwide stockholder who has made an exchangeable election to receive solely Partnership exchangeable units in connection with the merger as “exchangeable unit consideration” in this joint information statement/circular. We refer to the consideration to be received by a holder of Burger King Worldwide common stock in the merger, whether in the form of the Holdings consideration or the exchangeable unit consideration as the “merger consideration” in this joint information statement/circular.

Q: How do I make an election to receive only Partnership exchangeable units in the merger?

A: Each Burger King Worldwide stockholder is being sent an election form and letter of transmittal. You must properly complete and deliver to the merger exchange agent in this joint information statement/circular, the election materials, together with your stock certificates if you hold stock certificates for your shares of Burger King Worldwide common stock or an agent’s message or other evidence of transfer satisfactory to the merger exchange agent if you hold your shares of Burger King Worldwide common stock in book entry form. Your election form will not be deemed properly completed if you fail to deliver such stock certificates, agent’s message or other evidence of transfer to the merger exchange agent. A return envelope will be enclosed for submitting the election form and required materials to the merger exchange agent.

If your shares of Burger King Worldwide common stock are held in a brokerage or other custodial account, you should receive instructions from the entity which holds your shares advising you of the procedures for making your exchangeable election and delivering your shares. If you do not receive these instructions, you should contact the entity which holds your shares.

In the event the arrangement agreement is terminated, any Burger King Worldwide stock certificates that you previously sent to the merger exchange agent will be promptly returned to you without charge. For additional information about how to make an exchangeable election, see “The Transactions—Election and Proration Procedures; Exchange of Shares of Burger King Worldwide Common Stock.”

Q: Can I make one election for some of my shares and another election for the rest?

A: Yes. Each election form permits the holder to specify the number of such holder’s shares of Burger King Worldwide common stock with respect to which such holder makes an Partnership exchangeable election. Such election will be honored, subject to the proration procedures with respect to the Partnership exchangeable units described in this joint information statement/circular. For additional information about how to make an exchangeable election, see “The Transactions—Election and Proration Procedures; Exchange of Shares of Burger King Worldwide Common Stock.”

Q: Does the Burger King Worldwide board of directors recommend that a Burger King Worldwide stockholder make an exchangeable election?

A: The Burger King Worldwide board of directors makes no recommendation as to whether any stockholder should make an exchangeable election.

Q: Is 3G Capital making an exchangeable election?

A: Pursuant to the voting agreement, 3G agreed with Tim Hortons that it would make an exchangeable election with respect to all shares of Burger King Worldwide common stock that it holds. However, each Burger King Worldwide stockholder’s determination to make an exchangeable election is a purely voluntary decision and 3G’s commitment to make such election is not, nor should it be viewed as, a recommendation to make an exchangeable election to any other Burger King Worldwide stockholder.

 

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Q: Will each Burger King Worldwide stockholder who makes an exchangeable election be entitled to receive Partnership exchangeable units?

A: The election to receive the Partnership exchangeable unit consideration will be subject to allocation procedures designed to ensure that the fair market value of Holdings’ interest in Partnership is no less than 50.1% of the fair market value of all equity interests in Partnership as of the date on which the transactions are completed. If exchangeable elections are made by a number of Burger King Worldwide stockholders that would result in such former Burger King Worldwide stockholders owning Partnership exchangeable units that represent more than 49.9% of the fair market value of Partnership, then each Burger King Worldwide stockholder will be entitled to receive Partnership exchangeable units subject to the proration procedures described below.

If the aggregate number of Partnership exchangeable units that would be issued to Burger King Worldwide stockholders after taking into account all exchangeable elections made would represent a value in excess of 49.9% of the fair market value of all equity interests in Partnership, then a proration factor will be determined to ensure that Holdings maintains ownership of 50.1% of the fair market value of Partnership. Each holder of Burger King Worldwide common stock will receive Partnership exchangeable units equal to (a) the number of Partnership exchangeable units such stockholder would have received if no proration were applicable (the “non-prorated exchangeable units”) multiplied by (b) the proration factor. We refer to the number of units a Burger King Worldwide stockholder receives following proration as the “prorated exchangeable units”). Such stockholder will then receive a number of additional Holdings common shares equal to the difference between the number of Partnership exchangeable units such stockholder would have received if no proration were applicable (the “non-prorated exchangeable units”) and the prorated exchangeable units.

For more information regarding the proration of exchangeable elections, see “The Transactions—Election and Proration Procedures; Exchange of Shares of Burger King Worldwide Common Stock.”

Q: Can I sell my shares of Burger King Worldwide common stock after I submit an election form?

A: Under the terms of the arrangement agreement, in the event you make an exchangeable election, you will be required to deliver to the merger exchange agent the stock certificates evidencing your shares or an agent’s message or other evidence of transfer of the shares of Burger King Worldwide common stock to be converted into Partnership exchangeable units, in each case together with a properly completed and executed election form. In order to make a valid exchangeable election, you must deliver the stock certificates or an agent’s message or other evidence of transfer of the shares of Burger King Worldwide common stock and a duly completed and executed election form on or before the election deadline, which is the business day that is three business days prior to the anticipated closing date of the transactions. Accordingly, there may be a period of up to three business days between the election deadline and the date the merger is completed.

During the period from the date upon which you submit your election form until the closing of the merger, you will not be able to sell or otherwise transfer any shares of Burger King Worldwide common stock subject to the exchangeable election. However, if you revoke your exchangeable election with respect to any of your shares of Burger King Worldwide common stock prior to the election deadline, you will only be able to sell those shares following the return to you of the stock certificates evidencing those shares if there is sufficient time for the sale to be completed prior to the closing of the merger unless a subsequent exchangeable election is made prior to the election deadline that is not revoked.

Q: Will Partnership exchangeable units be listed on an exchange?

A: It is a condition to the completion of the transactions that the Partnership exchangeable units issued as merger consideration in the merger be conditionally approved for listing for trading on the TSX subject only to the satisfaction of customary listing conditions of the TSX. Partnership will apply to list the Partnership exchangeable units to be issued or made issuable pursuant to the merger on the TSX under the symbol [].

 

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Q: Will holders of Partnership exchangeable units be entitled to receive dividends?

A: The Partnership exchangeable units will be subject to the terms of the partnership agreement. Pursuant to the terms of the partnership agreement, each Partnership exchangeable unit will be entitled to distributions from Partnership in an amount equal to any dividends or distributions that shall have been declared and be payable in respect of a common share of Holdings. For additional information regarding dividends payable to holders of Partnership exchangeable units, see “Post-Transactions Organizational Structure—Description of the Partnership Exchangeable Units.”

Q: Will holders of Partnership exchangeable units be entitled to vote with respect to matters presented to Holdings shareholders?

A: Yes. Each Partnership exchangeable unit holder will have the benefit of a voting trust agreement to be entered into by and among Partnership, Holdings and a trustee to be agreed upon by Parent and Holdings (whom we refer to as the “trustee”). The trustee will hold a special voting share in Holdings (the “special voting share”) that entitles the trustee to a number of votes equal to the number of exchangeable units of Partnership outstanding. Pursuant to the terms of the voting trust agreement, the holders of exchangeable units of Partnership can direct the trustee, as their proxy, to vote on their behalf in substantially all votes that are presented to the common shareholders of Holdings.

Q: Will Partnership exchangeable units be exchangeable for Holdings common shares?

A: From and after the one-year anniversary of the closing date of the transactions, each holder of a Partnership exchangeable unit will have the right to require Partnership to exchange all or any portion of such holder’s exchangeable units for, at the election of Holdings, in its capacity as the general partner of Partnership, cash (in an amount determined in accordance with the terms of the partnership agreement) or Holdings common shares, at a ratio of one common share of Holdings for each Partnership exchangeable unit. Prior to the one-year anniversary of the closing of the transactions, holders of Partnership exchangeable units may not require Partnership to exchange their Partnership exchangeable units. If a holder of exchangeable units determines to exercise its exchange right with respect to such units, Holdings has the option, in its sole discretion, to deliver either Holdings’ common shares or the cash equivalent thereof. Accordingly, there can be no assurance that a holder of exchangeable units will be able to maintain its investment in Holdings’ business following any such exercise. For additional information about how to exchange Partnership exchangeable units, see “Post-Transactions Organizational Structure—Description of the Partnership Exchangeable Units”.

Q: What will happen to my Burger King Worldwide equity-based awards in the merger?

A: At the effective time of the merger, each outstanding Burger King Worldwide option will be converted into the right to receive, on the same terms and conditions as were applicable under the award agreement issued in connection with such Burger King Worldwide option (including with respect to vesting and exercise price), an option to acquire common shares from Holdings in respect of the same number of Holdings common shares as were subject to the underlying Burger King Worldwide option. At the effective time of the merger, each outstanding restricted stock unit will be converted into the right to receive, on the same terms and conditions as were applicable under such Burger King Worldwide restricted stock unit (including with respect to vesting), a restricted stock unit with respect to the same number of Holdings common shares as were subject to the underlying Burger King Worldwide restricted stock unit.

Q: What will happen to future dividends or distributions with respect to shares of Burger King Worldwide common stock?

A: Burger King Worldwide agreed that, beginning as of the date of the arrangement agreement, August 26, 2014, it will not and will not permit any of its subsidiaries to, without the prior written consent of Tim Hortons, make any dividend payments or distributions in respect of the Burger King Worldwide common stock other than routine quarterly cash dividends.

 

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Holdings’ decision as to whether or not to pay dividends on its common shares in the future, and if so, in what amount, will be made by Holdings’ board of directors and will depend on, among other factors, Holdings’ cash requirements, financial condition, restrictions imposed by its debt instruments, earnings and legal considerations.

No dividends or other distributions with respect to Holdings common shares or Partnership exchangeable units with a record date following the effective time of the merger will be paid to any former holder of shares of Burger King Worldwide common stock until such shares are surrendered to the merger exchange agent. Following surrender of such shares, the record holder of such shares of Burger King Worldwide common stock will be paid the amount of dividends or distributions (without interest) with a record date on or after the effective time of the merger that were not previously paid to such holder.

For additional information on dividends, see “The Transactions—Distributions with respect to Unexchanged Tim Hortons Common Shares and Shares of Burger King Worldwide Common Stock”.

Q: What are Burger King Worldwide’s reasons for the transactions?

A: The Burger King Worldwide board of directors considered many factors in making its determination that the arrangement agreement and the transactions contemplated thereby (including the merger), were fair and reasonable and in the best interests of Burger King Worldwide and Burger King Worldwide’s stockholders. For a more complete discussion of these factors, see “The Transactions—Burger King Worldwide’s Reasons for the Merger”.

In considering the recommendation of the board of directors of Burger King Worldwide and its reasons for the transactions, you should be aware that certain executive officers and all of the directors of Burger King Worldwide will have interests in the transactions that may be different from, or in addition to, the interests of Burger King Worldwide’s stockholders generally. See “The Transactions—Interests of Certain Persons related to Tim Hortons in the Transactions” and “The Transactions—Interests of Certain Persons related to Burger King Worldwide in the Transactions.”

Q: Has the Burger King Worldwide board of directors unanimously approved the arrangement agreement and the transactions contemplated thereby?

A: After careful consideration, the Burger King Worldwide board of directors has unanimously (i) approved and declared advisable the arrangement agreement and the transactions contemplated by the arrangement agreement, including the arrangement and the merger, (ii) determined that the arrangement agreement and such transactions are fair to, and in the best interests of, the Burger King Worldwide stockholders, and (iii) resolved to recommend that the Burger King Worldwide stockholders adopt the arrangement agreement, in each case upon the terms and subject to the conditions of the agreement.

Q: What are the U.S. federal income tax consequences of the transactions to holders of Burger King Worldwide common stock?

A: It is intended that the receipt of Partnership exchangeable units pursuant to the merger will qualify as an exchange within the meaning of section 721 of the Code for U.S. federal income tax purposes. Under such treatment, to the extent a Burger King Worldwide stockholder receives Partnership units, a U.S. holder (as defined on page [] of this joint information statement/circular) should recognize gain in a taxable exchange in an amount equal to the excess, if any, of (i) the fair market value of the interest in the Holdings Voting Trust received in the exchange, over (ii) a pro rata portion (based on the relative values of the Holdings voting shares and Partnership units received by such holder) of the holder’s aggregate adjusted tax basis in the Burger King Worldwide stock exchanged for Partnership units. The value of an interest in the Holdings Voting Trust is expected to be nominal. See “The Transactions—Material U.S. Federal Income Tax Considerations of the Merger to U.S. Holders—Burger King Worldwide Stockholders Receiving Partnership Units.”

 

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It is intended that the merger, taken together with the arrangement, qualify as a transaction described in section 351 of the Code. Under such treatment, to the extent a Burger King Worldwide stockholder receives Holdings common shares, U.S. holders of Burger King Worldwide stock will be required to recognize gain (but not loss) on their exchange of Burger King Worldwide stock for Holdings common shares in the merger. The amount of gain recognized should equal the excess, if any, of the fair market value of Holdings common shares received in the merger over the U.S. holder’s adjusted tax basis in the Burger King Worldwide stock exchanged therefor. Such gain or loss must be determined separately for separate blocks of Burger King Worldwide stock (i.e., stock acquired at different times or prices). Thus, if a U.S. holder transfers some Burger King Worldwide stock on which gains are realized and other Burger King Worldwide stock on which losses are realized, the U.S. holder may not net the losses against the gains to determine the amount of gain recognized. See “The Transactions—Material U.S. Federal Income Tax Considerations of the Merger to U.S. Holders—Burger King Worldwide Stockholders Receiving Holdings Common Shares.”

Non-U.S. holders (as defined on page [] of this joint information statement/circular) of Burger King Worldwide generally will not be subject to U.S. federal income tax on any gain recognized on the transactions unless the gain is effectively connected with a U.S. trade or business of such non-U.S. holder (or, if an income tax treaty applies, is attributable to a United States “permanent establishment”) or such non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of the disposition, and certain other conditions are met. See “The Transactions—Material U.S. Federal Income Tax Considerations for Non-U.S. Holders—The Transactions.”

Q: What are the Canadian federal income tax consequences of the transactions to holders of Burger King Worldwide common stock?

A: A Burger King Worldwide stockholder who is resident in Canada for the purposes of the Income Tax Act (Canada) (the “Tax Act”) and holds Burger King Worldwide common stock as capital property will realize a capital gain (or capital loss) on the merger equal to the amount by which the sum of the fair market value, at the time of the merger, of the Partnership exchangeable units and any Holdings common shares received in exchange for such stockholder’s Burger King Worldwide common stock and any cash received in lieu of a fractional Partnership exchangeable unit or Holdings common share, net of any reasonable costs of disposition, exceeds (or is less than) the aggregate adjusted cost base to such shareholder of such Burger King Worldwide common stock.

Generally, a Burger King Worldwide stockholder who is not resident in Canada for purposes of the Income Tax Act (Canada) will not be subject to tax under the Tax Act in respect of any capital gain realized on the exchange of Burger King Worldwide common stock for Partnership exchangeable units and any Holdings common shares.

The foregoing is a brief summary of Canadian federal income tax consequences only and is qualified by the more detailed general description of Canadian federal income tax considerations under “The Transactions—Material Canadian Federal Income Tax Consequences of the Transactions”. Burger King Worldwide stockholders are urged to consult their own tax and legal advisors to determine the particular tax consequences to them of the merger.

Q: Will appraisal rights be available for dissenting Burger King Worldwide stockholders?

A: No. There are no appraisal rights available to Burger King Worldwide stockholders in connection with the merger.

 

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Q: What do I need to do now?

A: Carefully read and consider the information contained in, and incorporated by reference into, this joint information statement/circular, including its Annexes. If after reviewing all such information you decide to make a Partnership exchangeable election, you must properly complete and deliver to the merger exchange agent the election materials prior to the election deadline.

Q: Should I send certificates representing shares of Burger King Worldwide common stock now?

A: Unless you are submitting an election form to make a Partnership exchangeable election, please do not send any stock certificates or documents representing your ownership of Burger King Worldwide common stock at this time. If the transactions are consummated, you will receive a subsequent letter explaining what to do with your stock certificates.

Q: Who can help answer my questions?

A: Burger King Worldwide stockholders who have questions about the merger or desire additional copies of this joint information statement/circular should contact:

Investor Relations

(305) 378-7696

investor@whopper.com

Questions and Answers for Tim Hortons Shareholders

Q. Why am I receiving this joint information statement/circular?

A: This document is being delivered to Tim Hortons shareholders as a management proxy circular in connection with the solicitation of proxies by or on behalf of the management of Tim Hortons in connection with the arrangement. In order to complete the arrangement, Tim Hortons shareholders must approve the arrangement resolution. Tim Hortons will hold a special meeting of its shareholders to obtain this approval.

Q: What are the proposals on which I am being asked to vote in my capacity as a Tim Hortons shareholder?

A: At the Tim Hortons special meeting, Tim Hortons shareholders will vote on the arrangement resolution, to approve an arrangement under section 192 of the CBCA.

The Tim Hortons board of directors recommends that Tim Hortons shareholders vote their shares “FOR” approval of the arrangement resolution.

Q: What will I receive in the arrangement?

A: If the arrangement is completed, at the effective time of the arrangement each holder of a common share of Tim Hortons will be entitled to receive C$65.50 in cash and 0.8025 newly issued Holdings common shares (the “arrangement mixed consideration”) in exchange for each common share of Tim Hortons held by such shareholder, other than shareholders who (a) make an election to receive cash (a “cash election”), who will be entitled to receive C$88.50 in cash in exchange for each Tim Hortons common share held by such shareholder, subject to proration as described in this joint information statement/circular (the “arrangement cash consideration”) or (b) make an election to receive Holdings common shares (a “shares election”), who will be

 

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entitled to receive 3.0879 newly issued Holdings common shares in exchange for each share of Tim Hortons held by such shareholder, subject to proration as described in this joint information statement/circular (the “arrangement shares consideration”). References to the “arrangement consideration” in this joint information statement/circular mean the consideration to be received by a holder of Tim Hortons common shares in the arrangement, whether in the form of mixed consideration, cash or Holdings common shares. We refer to the election to receive the arrangement mixed consideration, the cash election or the shares election as the “arrangement election” in this joint information statement/circular. References to “arrangement election” in this joint information statement/circular mean the election to receive the arrangement mixed consideration, cash election and shares election.

Q: What is the value of the arrangement consideration?

A: Based upon the closing price of shares of Burger King Worldwide common stock as of August 22, 2014, the last trading day before the public announcement of the negotiations between Burger King Worldwide and Tim Hortons, the arrangement mixed consideration values each Tim Hortons common share at approximately C$89.39, which is calculated as the sum of (i) C$65.50, which is the cash portion of the consideration to be paid to Tim Hortons shareholders and (ii) C$23.89, which is the closing price in U.S. dollars of a share of Burger King Worldwide common stock as of such date multiplied by the exchange ratio of 0.8025 multipled by a USD/CAD noon exchange rate of 1.0980 reported by the Bank of Canada as of August 25, 2014. Tim Hortons shareholders may elect to receive C$88.50 in cash (the arrangement cash consideration) or 3.0879 Holdings common shares (the arrangement shares consideration) instead of receiving the arrangement mixed consideration.

Q: How do I make a cash election or a shares election in the arrangement?

A: Each registered Tim Hortons shareholder is being sent an election form and letter of transmittal. A return envelope will be enclosed for submitting the election form and the letter of transmittal to the arrangement exchange agent.

If your shares are held in a brokerage or other custodial account, you should receive instructions from the entity which holds your shares advising you of the procedures for making your election and delivering your shares. If you do not receive these instructions, you should contact the entity which holds your shares.

If you fail to make a proper election by the election deadline, you will be deemed to have elected to receive the arrangement mixed consideration in respect of your Tim Hortons shares. See “The Transactions—Election and Proration Procedures; Procedures for Converting Tim Hortons Common Shares into Arrangement Consideration; Dissenter’s Rights; Withholding Rights.”

Q: Can I make one election for some of my shares and another election for the rest?

A: Yes. Each election form permits the holder to specify the number of such holder’s Tim Hortons common shares with respect to which such holder makes a cash election or a shares election. Such election will be honored, subject to the adjustments with respect to such elections described in this joint information statement/circular.

Q: Does the Tim Hortons board of directors recommend that a Tim Hortons shareholder make a cash election or shares election?

A: The Tim Hortons board of directors makes no recommendation as to whether any shareholder should make a cash election or shares election.

 

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Q: Will each Tim Hortons shareholder who makes a cash election or shares election be entitled to receive solely cash or solely Holdings common shares elected?

A: Not necessarily. Tim Hortons shareholders who elect to receive the arrangement cash consideration or the arrangement shares consideration will be subject to proration as described in this joint information statement/circular so that the total amount of cash paid and the total number of Holdings common shares issued to Tim Hortons shareholders as a whole are equal to the total amount of cash and number of Holdings common shares that would have been paid and issued if all of Tim Hortons shareholders received the arrangement mixed consideration.

The mix of consideration payable to Tim Hortons shareholders who make the cash election or the shares election, after giving effect to the proration procedure, will not be known until Holdings tallies the results of the elections made by Tim Hortons shareholders, which will not occur until shortly prior to the closing of the arrangement.

See “The Transactions—Description of Preliminary Steps Prior to the Arrangement” and “The Transactions—Election and Proration Procedures; Procedures for Converting Tim Hortons Common Shares into Arrangement Consideration; Dissenter’s Rights; Withholding Rights”.

Q: Can I sell my Tim Hortons shares after submitting an election form?

A: Under the terms of the plan of arrangement, in order to make an arrangement election, you will be required to deliver a properly completed and executed election form to the arrangement exchange agent on or before the election deadline, which is three business days prior to the anticipated effective date of the arrangement. Accordingly, there will be a period of time between the date a valid election has been received and the date the arrangement is completed. During the period from the date upon which you submit your election form until the closing of the arrangement, you will not be able to sell or otherwise transfer any Tim Hortons shares subject to the arrangement election.

Any duly completed election form and letter of transmittal, once deposited with the exchange agent, will be irrevocable and may not be withdrawn by a Tim Hortons shareholder.

Q: What will happen to my Tim Hortons equity-based awards in the arrangement?

A: Under the arrangement, equity awards previously granted by Tim Hortons will be treated as follows:

Tim Hortons Stock Options. Pursuant to the effective time of the arrangement, each outstanding vested Tim Hortons stock option for which a Tim Hortons optionholder has executed a surrender form (a “surrendered Tim Hortons stock option”) will be surrendered and transferred to Tim Hortons in consideration for the issuance of the number of Tim Hortons common shares, rounded down to the nearest whole share, equal in value to the in-the-money value of such surrendered Tim Hortons stock option. The in-the-money value of the Tim Hortons stock option is the amount by which the fair market value of a Tim Hortons common share exceeds the exercise price of the Tim Hortons stock option. The surrendered Tim Hortons stock options will be terminated at the time of their surrender and Tim Hortons common shares issued in respect of such surrendered stock options will be treated as described below.

Pursuant to the Arrangement, each outstanding Tim Hortons stock option (and its tandem stock appreciation right), whether vested or unvested, that is not a surrendered Tim Hortons stock option will be exchanged for a stock option (with a tandem stock appreciation right) to acquire from Holdings a number of Holdings common shares equal to the product of: (a) the number of Tim Hortons common shares subject to such Tim Hortons stock option multiplied by (b) the exchange ratio of 3.0879 (and rounded down to the nearest whole number of

 

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Holdings common shares). The exercise price per Holdings common share of such Holdings stock option shall be equal to the quotient of: (a) the exercise price per Tim Hortons common share subject to the exchanged Tim Hortons stock option divided by (b) the exchange ratio of 3.0879 (with the aggregate exercise price being rounded up to the nearest whole cent), provided that the in-the-money value of such Holdings stock options immediately after the issuance of such Holdings stock options may not exceed the in-the-money value of the Tim Hortons stock options immediately prior to such issuance. Subject to the foregoing, each Holdings stock option will have the same terms and conditions as were applicable to the exchanged Tim Hortons stock option.

Restricted Stock Units and Performance Stock Units. Pursuant to the arrangement, all outstanding Tim Hortons restricted stock units and performance stock units will vest, with the number of performance stock units vesting determined based on the maximum or highest level achievable, and Tim Hortons common shares will be issued in full settlement of such awards on the basis of one Tim Hortons common share for each restricted stock unit or performance stock unit.

Tim Hortons common shares issued in consideration for surrendered Tim Hortons stock options or in settlement of restricted stock unit awards and performance stock unit awards will be transferred to Amalgamation Sub pursuant to the arrangement and the holders of such Tim Hortons common shares will be entitled to make an election in respect of the arrangement consideration to be received in consideration for such transfer.

Deferred Stock Units. At the effective time of the arrangement, all outstanding Tim Hortons deferred stock units will vest and Tim Hortons will pay holders of Tim Hortons deferred stock units an amount in cash for each Tim Hortons deferred stock unit equal to C$65.50 plus the value of 0.8025 newly issued common shares of Holdings (with the value determined based on the opening price of a common share of Holdings on the NYSE on the first trading day following the effective time of the arrangement).

Q: What will happen to my future dividends or distributions?

A: As of the date of the arrangement agreement, August 26, 2014, Tim Hortons agreed that it will generally not and will not permit any of its subsidiaries to, without the prior written consent of Burger King Worldwide, make any dividend payments or distributions in respect of the Tim Hortons common shares or the equity interests of its subsidiaries other than dividends or distributions by a direct or indirect wholly owned subsidiary of Tim Hortons to its parent company in the ordinary course of business. However, Tim Hortons is permitted to declare or pay a dividend or set a record date for dividends consistent with past practices provided that such dividend is in an amount not to exceed C$0.32 per Tim Hortons common share. If any dividend is paid in excess of C$0.32 per Tim Hortons common share, then Tim Hortons and Burger King Worldwide have agreed to adjust the cash portion of the arrangement mixed consideration payable to Tim Hortons shareholders to reflect the original intention of Tim Hortons and Burger King Worldwide.

No dividends or other distributions with respect to Holdings common shares with a record date following the effective time of the arrangement will be paid to any former holder of shares of Tim Hortons common shares until such shareholder submits its election form and letter of transmittal to the arrangement exchange agent. Following surrender of such shares, the record holder of shares of Tim Hortons common shares will be paid the amount of dividends or distributions (without interest) with a record date on or after the effective time of the arrangement that were not previously paid to such holder. For additional information on dividends, see “The Transactions—Distributions with respect to Unexchanged Tim Hortons Common Shares and Shares of Burger King Worldwide Common Stock”. For additional information about how to submit your election form and letter of transmittal, see “The Transactions—Election and Proration Procedures; Exchange of Shares of Burger King Worldwide Common Stock”.

Q: What vote is required to approve the arrangement resolution?

A: The arrangement resolution requires the affirmative vote of at least 66 23% of the votes cast on the arrangement resolution by Tim Hortons shareholders present in person or represented by proxy at the Tim Hortons special meeting.

 

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Q: When and where will the Tim Hortons shareholder meetings be held?

A: The Tim Hortons special meeting will be held at the [] in Toronto, Ontario, Canada, [] on [], 2014 at [] a.m. (Toronto time).

Q: Who is entitled to attend the Tim Hortons special meeting?

A: All Tim Hortons shareholders are invited to attend the Tim Hortons special meeting, including registered and beneficial shareholders of Tim Hortons.

Q: Who is entitled to vote at the Tim Hortons special meeting?

A: Only Tim Hortons shareholders of record as of the record date for the Tim Hortons special meeting and their duly appointed proxies are entitled to vote at the Tim Hortons special meeting.

Tim Hortons has fixed [], 2014 as the record date for the Tim Hortons special meeting, which we refer to in this joint information statement/circular as the “Tim Hortons record date”. If you were a Tim Hortons shareholder as of the close of business on such date, you are entitled to vote on matters that come before the Tim Hortons special meeting.

Q: How many votes do I have?

A: Each Tim Hortons common share represented in person or by proxy at the meeting is entitled to one vote, other than Tim Hortons common shares held by the TDL RSU Employee Benefit Plan Trust. Tim Hortons had [] Tim Hortons common shares issued and outstanding at the close of business on the Tim Hortons record date. Of this total, [] Tim Hortons common shares are entitled to vote at the Tim Hortons special meeting while the remaining [] Tim Hortons common shares held by The TDL RSU Employee Benefit Plan Trust are not. On a vote by show of hands, every registered shareholder and duly appointed proxyholder present in person has one vote. There are no other classes of voting securities other than the Tim Hortons common shares.

Q: How do I vote?

A: First, determine whether you are a registered shareholder or a beneficial shareholder of Tim Hortons common shares. You are a registered shareholder of Tim Hortons if your Tim Hortons common shares are registered in your name, as opposed to being held through a broker or other intermediary, which we refer to in this joint information statement/circular as an “intermediary”).

If you are a registered shareholder, you may vote in any of the following ways:

 

    By phone—Call toll free (866) 732-VOTE (8683) from a touchtone phone and follow the instructions;

 

    On the internet—Go to www.investorvote.com and follow the instructions on the screen;

 

    By mail—Complete the proxy form, sign and date it, and mail it in the postage-paid envelope provided; or

 

    In person—Check in with a Computershare Trust Company of Canada (“Computershare”) representative when you arrive at the Tim Hortons special meeting and be sure to bring government-issued picture identification.

If you are a beneficial Tim Hortons shareholder, you may vote in any of the following ways:

 

    By phone—Follow the instructions on the voting instruction form provided by your intermediary;

 

    On the internet—Go to www.proxyvote.com and follow the instructions on the screen;

 

    By mail—Complete the voting instruction form, sign and date it, and mail it in the return envelope provided as soon as possible, so your intermediary receives the form in time to carry out your instructions; or

 

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    In person—The voting instruction form provided by your intermediary will provide instructions on how you may vote in person at the Tim Hortons special meeting. The following is a general summary of the most common alternatives provided by intermediaries:

 

    The instructions provided by your intermediary may permit you to vote in person at the Tim Hortons special meeting by appointing yourself as proxyholder for your Tim Hortons common shares by printing your own name in the space provided, signing the form and NOT indicating your voting instructions. If you do so, send the form to your intermediary as soon as possible to give your intermediary enough time to act on your instructions. Computershare must receive instructions through your intermediary before midnight (Toronto time) on [], 2014 (the second business day before the Tim Hortons special meeting), or if the Tim Hortons special meeting is postponed or adjourned, before midnight (Toronto time) on the business day before the Tim Hortons special meeting is reconvened.

 

    Alternatively, the instructions provided by your intermediary may state that in order to vote in person at the Tim Hortons special meeting, you must indicate on the voting instruction form that you want to receive a proxy form, sign and date it, and send the completed voting instruction form to your intermediary as soon as possible. You should then receive a proxy form from your intermediary, which you will need to complete, appointing yourself as proxyholder. Sign and date the proxy form and send it as soon as possible to Computershare in the envelope provided. Computershare must receive the properly completed proxy form by midnight (Toronto time) on [], 2014 (the second business day before the Tim Hortons special meeting), or if the Tim Hortons special meeting is postponed or adjourned, before midnight (Toronto time) on the business day before the Tim Hortons special meeting is reconvened.

Canadian securities laws require brokers and other intermediaries to seek voting instructions from beneficial shareholders in advance of shareholder meetings. The various brokers and other intermediaries have their own mailing procedures and provide their own return instructions to clients, which should be carefully followed by beneficial shareholders in order to ensure that their Tim Hortons common shares are voted at the Tim Hortons special meeting. The voting instruction form supplied to a beneficial shareholder by its broker (or the agent of the broker) is substantially similar to the instrument of proxy provided directly to registered shareholders by Tim Hortons. However, its purpose is limited to instructing the registered shareholder (i.e., the intermediary or agent of the intermediary) how to vote on behalf of the beneficial shareholder. A beneficial shareholder who receives a voting instruction form from its broker or other intermediary cannot use that form to vote Tim Hortons common shares directly at the Tim Hortons special meeting. The voting instruction form must be returned to your broker or other intermediary (or instructions respecting the voting of Tim Hortons common shares must otherwise be communicated to your broker or other intermediary) well in advance of the Tim Hortons special meeting in order to have the Tim Hortons common shares voted. If you have any questions respecting the voting of Tim Hortons common shares held through a broker or other intermediary, please contact that broker or other intermediary for assistance.

Q: My shares are held in “street name” by my broker, or I am a beneficial shareholder. Will my intermediary automatically vote my shares for me?

A: If you are a beneficial shareholder of Tim Hortons and your intermediary (i) does not have discretionary authority to vote your Tim Hortons common shares on a particular matter and has not received instructions from you on how to vote, or (ii) does have discretionary authority but has not received proper instructions from you and cannot vote your Tim Hortons common shares as a result, then your votes will not be cast. In such cases, the intermediary simply declines to vote your Tim Hortons common shares. As a result of restrictions under the CBCA and rules governing members of the NYSE, your intermediary cannot vote your Tim Hortons common shares on a discretionary basis if you do not provide proper voting instructions.

 

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If abstentions are received by the scrutineer, they will only be counted for determining whether or not Tim Hortons has a quorum. Abstentions are not counted towards shareholder votes on any matter described in this joint information statement/circular.

Q: What will happen if I return my form of proxy or voting instruction form without indicating how to vote?

A: Proxyholders must vote Tim Hortons common shares according to the instructions given to them by Tim Hortons shareholders. If you, as a Tim Hortons shareholder, do not specify your voting instructions, your proxyholder can vote as he/she sees fit. If you do not specify your voting instructions and you have appointed Tim Hortons representatives appointed by the Tim Hortons board of directors to act as your proxyholder, they will vote for approving the arrangement resolution.

Proxyholders have the authority to vote as he/she sees fit with respect to any other matters that properly come before the Tim Hortons special meeting and with respect to any amendments to the matters identified in the notice of meeting or any adjournment or postponement thereof, whether or not the amendment or other matter that comes before the Tim Hortons special meeting is or is not routine and whether or not the amendment or other matter that comes before the Tim Hortons special meeting is contested. As of the date of this joint information statement/circular, Tim Hortons is not aware of any items to be brought before the Tim Hortons special meeting that are not described in this joint information statement/circular.

Q: What constitutes a quorum?

A: A quorum for Tim Hortons is the presence, in person or by proxy, at the opening of the Tim Hortons special meeting of a minimum number of at least five Tim Hortons shareholders holding, in the aggregate, at least 51% of the outstanding Tim Hortons common shares as of the Tim Hortons record date entitled to vote at the Tim Hortons special meeting, in order for the Tim Hortons special meeting to proceed and to transact business. Abstentions are treated as present when determining if Tim Hortons has a quorum.

Q: Can I change my vote after I have returned a proxy form or voting instruction form?

A: If you are a beneficial shareholder: You may change your vote by providing new instructions on a voting instruction form or proxy form with a later date, or at a later time in the case of voting by telephone or through the internet, to your broker or other intermediary; provided that your new voting instructions are received by Computershare before midnight (Toronto Time) on [], 2014 (the second business day before the Tim Hortons special meeting), or if the Tim Hortons special meeting is postponed or adjourned, before midnight (Toronto Time) on the business day before the Tim Hortons special meeting is reconvened. Be sure to allow enough to time for your intermediary to receive your instructions or revocation and act on them prior to that deadline. You must contact your intermediary in order to revoke your previous voting instructions without submitting new voting instructions. You will need to allow for enough time for your intermediary to act on such instructions prior to the vote on the matter.

If you are a registered shareholder: You may change your vote by providing a new proxy form with a later date, or provide new voting instructions at a later time in the case of voting by telephone or through the internet, to Computershare; provided that your new voting instructions are received by Computershare before midnight (Toronto Time) on [], 2014 (the second business day before the Tim Hortons special meeting), or if the Tim Hortons special meeting is postponed or adjourned, before midnight (Toronto Time) on the business day before the Tim Hortons special meeting is reconvened. In addition, you can attend the Tim Hortons special meeting in person and cast a different vote if you specifically request the opportunity to do so at the Tim Hortons special meeting. Also, you can revoke your previous voting instructions without submitting new voting instructions at any time prior to the final vote at the meeting by delivering a written notice to the chairman of the meeting prior

 

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to the vote on the matter or by any other manner permitted by law. The written notice of revocation may be executed by the registered shareholder or by an attorney who provides your written authorization. If the shareholder is a corporation, the written notice must be executed by its duly authorized officer or attorney.

Q: What happens if I sell my shares before the Tim Hortons special meeting?

A: The record date of the Tim Hortons special meeting is [], 2014. If you transfer your Tim Hortons common shares after the Tim Hortons record date but before the Tim Hortons special meeting, you will retain (subject to any arrangements made with the purchaser of your shares) your right to vote at your meeting. In order for Tim Hortons shareholders to receive the arrangement consideration, they must hold their Tim Hortons common shares through the effective time of the arrangement.

Q: Are Tim Hortons shareholders entitled to dissent rights?

A: Registered shareholders of Tim Hortons are expected to be entitled to dissent rights in connection with the arrangement, provided that the applicable Tim Hortons shareholder complies with all applicable requirements and procedures under the CBCA, as expected to be modified by the order given by the Ontario court (the “interim order”). A beneficial shareholder wishing to exercise dissent rights must become a registered holder prior to the deadline for exercising dissent rights, which deadline is not later than 5:00 p.m., Toronto time, on [], 2014, being two business days preceding the Tim Hortons special meeting (or, if the Tim Hortons special meeting is postponed or adjourned, two business days preceding the date of the postponed or adjourned special meeting). See “The Transactions—Appraisal / Dissent Rights”.

Q: What are the U.S. federal income tax consequences of the transactions to holders of Tim Hortons common shares?

A: It is intended that the arrangement, taken together with the merger, qualify as a transaction described in Section 351 of the Code. Under such treatment, the U.S. federal income tax consequences to U.S. holders of Tim Hortons shares will depend on the mix of consideration and the amount of cash received in the arrangement. In the case of a U.S. holder of Tim Hortons common shares who receives solely cash in the arrangement, such U.S. holder generally will recognize gain or loss in an amount equal to the difference between the amount of cash received and such U.S. holder’s adjusted tax basis in the Tim Hortons common shares exchanged. In the case of a U.S. holder of Tim Hortons common shares who receives a combination of cash (including any cash received in lieu of a fractional Holdings common share) and Holdings common shares in the arrangement, (A) If the sum of such cash (including any cash received in lieu of a fractional Holdings common share) and the fair market value of such Holdings common shares is greater than such U.S. holder’s adjusted tax basis in the Tim Hortons shares exchanged, then such U.S. holder should recognize gain equal to the lesser of (i) the amount by which the sum of such cash and fair market value of such Holdings common shares exceeds such U.S. holder’s adjusted tax basis in such U.S. holder’s Tim Hortons shares; and (ii) the cash received by such U.S. holder in the arrangement and (B) if the sum of such cash and fair market value of such Holdings common shares is less than such U.S. holder’s adjusted tax basis in such U.S. holder’s Tim Hortons shares, such U.S. holder should not recognize a loss. Such gain or loss must be determined separately for separate blocks of Tim Hortons common shares (i.e., shares acquired at different times or prices). Thus, if a U.S. holder transfers some Tim Hortons common shares on which gains are realized and other Tim Hortons common shares on which losses are realized, the U.S. holder may not net the losses against the gains to determine the amount of gain recognized. See “Material U.S. Federal Income Tax Considerations of the Arrangement to U.S. Holders”.

Non-U.S. holders of Tim Hortons generally will not be subject to U.S. federal income tax on any gain recognized on the transactions unless the gain is effectively connected with a U.S. trade or business of such non-U.S. holder (or, if an income tax treaty applies, is attributable to a United States “permanent establishment”) or such non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of the disposition, and certain other conditions are met. See “The Transactions—Material U.S. Federal Income Tax Considerations for Non-U.S. Holders”.

 

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Q: What are the Canadian federal income tax consequences of the transactions to holders of Tim Hortons common shares?

A: Tim Hortons shareholders who are residents of Canada for purposes of the Tax Act will realize a capital gain (or capital loss) on the disposition of their Tim Hortons shares pursuant to the plan of arrangement regardless of whether or not they receive the arrangement mixed consideration or make the cash election or the arrangement shares election. The capital gain (or the capital loss) will be equal to the amount, if any, by which the sum of the cash, if any, and the fair market value, at the time of the arrangement, of any Holdings common shares received in exchange for such shareholder’s Tim Hortons common shares, net of any reasonable costs of disposition, exceed (or are less than) the adjusted cost base to such shareholders of their Tim Hortons shares immediately before the disposition. Tim Hortons shareholders who are not residents of Canada for purposes of the Tax Act and whose Tim Hortons shares are not “taxable Canadian property” will not be subject to tax under the Tax Act on the disposition of their Tim Hortons shares pursuant to the plan of arrangement regardless of whether or not they make the cash election or the arrangement shares election. The foregoing is a brief summary of Canadian federal income tax consequences only and is qualified by the more detailed general description of Canadian federal income tax considerations under “The Transactions—Material Canadian Federal Income Tax Consequences of the Transactions”. Tim Hortons shareholders are urged to consult their own tax and legal advisors to determine the particular tax consequences to them of the arrangement.

Q: What do I need to do now?

A: Carefully read and consider the information contained in, and incorporated by reference into, this joint information statement/circular, including its Annexes, then please authorize a proxy to vote your shares as soon as possible so that your shares may be represented at the Tim Hortons special meeting. If after reviewing all such information you decide to make a cash election or shares election, you must properly complete and deliver to the exchange agent the election form and letter of transmittal prior to the election deadline.

See “The Transactions—Election and Proration Procedures; Procedures for Converting Tim Hortons Common Shares into Arrangement Consideration; Dissenter’s Rights; Withholding Rights”.

Q: Should I send in my election form and letter of transmittal now?

A: To make a shares election or a cash election, each registered Tim Hortons shareholder must forward a properly completed and signed election form and letter of transmittal in order to receive the arrangement consideration. It is recommended that Tim Hortons shareholders complete, sign and return the election form and letter of transmittal to the arrangement exchange agent as soon as possible if it wishes to make either such election.

Q: Who is soliciting my proxy?

A: Tim Hortons management is soliciting your proxy for use at the Tim Hortons special meeting and any adjournment or postponement thereof. All associated costs of the proxy solicitation will be borne by Burger King Worldwide. In addition to the use of the mail, proxies may be solicited directly by directors, officers and other employees of Tim Hortons, without additional remuneration, by personal interview, telephone, facsimile or otherwise. Tim Hortons will also request brokerage firms, nominees, custodians and fiduciaries to forward proxy materials to the beneficial owners of Tim Hortons common shares and Burger King Worldwide will provide customary reimbursement to such firms for the cost of forwarding these materials. Tim Hortons has retained [] to assist in its solicitation of proxies and has agreed to pay them a fee of approximately $[], plus reasonable out-of-pocket expenses, for these services.

Q: Who can help answer my questions?

A: Tim Hortons shareholders who have questions about the arrangement resolution to be voted on at the Tim Hortons special meeting or desire additional copies of this joint information statement/circular or additional proxy cards or voting instruction forms should contact:

 

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SUMMARY

This summary highlights selected information contained in this joint information statement/circular and may not contain all of the information that is important to you. You should read carefully this entire joint information statement/circular, including the Annexes and the documents incorporated by reference, to fully understand the transactions and the voting procedures for the special meeting of Tim Hortons shareholders (the “Tim Hortons special meeting”).

The Arrangement Agreement and Plan of Merger, which we refer to as the “arrangement agreement” dated as of August 26, 2014, by and among Burger King Worldwide, Inc. (“Burger King Worldwide”), Tim Hortons Inc. (“Tim Hortons”), 1011773 B.C. Unlimited Liability Company, an unlimited liability company organized under the laws of British Columbia (“Holdings”), New Red Canada Partnership, a general partnership organized under the laws of Ontario whose partnership interests are held either directly or indirectly by Holdings (“Partnership”), Blue Merger Sub, Inc., a corporation incorporated under the laws of Delaware and a wholly owned subsidiary of Partnership (“Merger Sub”), and 8997900 Canada Inc., a corporation organized under the laws of Canada and a wholly owned subsidiary of Partnership (“Amalgamation Sub”) is attached as Annex A to this joint information statement/circular. The terms “we,” “us” and “our” refer to Holdings after giving effect to the transactions described in this joint information statement/circular.

This summary and the rest of this document contain forward-looking statements about events that are not certain to occur, and you should not place undue reliance on those statements; see the section entitled “Cautionary Note Regarding Forward Looking Statements” for more information. The page references have been included in this summary to direct you to a more complete description of the topics presented below. See also the section entitled “Where You Can Find More Information”.

The Arrangement Agreement, Plan of Arrangement and the Transactions (page [])

Burger King Worldwide agreed to combine with Tim Hortons pursuant to the arrangement agreement in a transaction that will result in Burger King Worldwide and Tim Hortons being indirect subsidiaries of Holdings and Partnership. The transactions will be effectuated in two primary steps. In the first step, Amalgamation Sub will acquire Tim Hortons pursuant to a plan of arrangement under Canadian law, which will result in Tim Hortons becoming an indirect subsidiary of both Holdings and Partnership (the “arrangement”). In the second step, Merger Sub will merge with and into Burger King Worldwide, with Burger King Worldwide as the surviving corporation in the merger, which will result in Burger King Worldwide becoming an indirect subsidiary of both Holdings and Partnership (the “merger” and, together with the arrangement, the “transactions”). Holdings, which will be renamed and will become a corporation organized under the laws of Canada, will be the general partner of Partnership and will own a majority interest in Partnership (based on vote and value) as described below, with the balance of the partnership units of Partnership initially being held by the holders of Burger King Worldwide common stock prior to the effective time of the merger.

The arrangement agreement and the plan of arrangement are attached as Annex A and Annex B, respectively, to this joint information statement/circular. We encourage you to read these documents in their entirety; they are the principal documents governing the transactions and the other related transactions.

Information About the Companies (page [])

TIM HORTONS INC.

874 Sinclair Road

Oakville, Ontario, Canada

L6K 2Y1

(905) 845-6511

 

 

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Tim Hortons Inc. is one of the largest publicly-traded quick-service restaurant chains in North America based on market capitalization and the largest in Canada based on systemwide sales and number of locations. Tim Hortons appeals to a broad range of consumer tastes, with a menu that includes its premium blend coffee, espresso-based hot and cold specialty drinks (including lattes, cappuccinos and espresso shots), iced cappuccinos, specialty and steeped teas, cold beverages, fruit smoothies, home-style soups, chili, grilled Panini and classic sandwiches, wraps, yogurt and berries, oatmeal, breakfast sandwiches and wraps, and fresh baked goods, including donuts, Timbits®, bagels, muffins, cookies, croissants, Danishes, pastries and more.

BURGER KING WORLDWIDE, INC.

5505 Blue Lagoon Drive

Miami, Florida, USA 33126

(305) 378-3000

Burger King Worldwide, Inc. is a Delaware corporation formed on April 2, 2012 and the indirect parent of Burger King Corporation, a Florida corporation that franchises and operates fast food hamburger restaurants, principally under the Burger King® brand. Burger King Worldwide is the world’s second largest fast food hamburger restaurant chain as measured by the total number of restaurants. As of December 31, 2013, Burger King Worldwide owned or franchised a total of 13,808 restaurants in 98 countries and U.S. territories worldwide, of which approximately 100% were franchised. Burger King Worldwide restaurants are limited service restaurants that feature flame-grilled hamburgers, chicken and other specialty sandwiches, French fries, soft drinks and other affordably-priced food items. Burger King Worldwide believes its restaurants appeal to a broad spectrum of consumers, with multiple day parts and product platforms appealing to different customer groups. During its nearly 60 years of operating history, Burger King Worldwide has developed a scalable and cost-efficient quick service hamburger restaurant model that offers guests fast and delicious food.

1011773 B.C. UNLIMITED LIABILITY COMPANY

1600-925 West Georgia Street

Vancouver, British Columbia, Canada

V6C 3L2

(305) 378-3000

1011773 B.C. Unlimited Liability Company is an unlimited liability company organized under the laws of British Columbia. Holdings was formed solely to effect the transactions and has not conducted any business, other than in connection with the arrangement agreement, equity financing, debt financing and related ancillary agreements to which Holdings is a party. Prior to the closing of the transactions and pursuant to the arrangement agreement, Holdings will be renamed and will become a corporation organized under the laws of Canada. Pursuant to the arrangement agreement, Tim Hortons and Burger King Worldwide will survive as indirect subsidiaries of Holdings. Holdings will apply to list its common stock for trading on the New York Stock Exchange (the “NYSE”) and the Toronto Stock Exchange (the “TSX”) under the symbol [].

NEW RED CANADA PARTNERSHIP

155 Wellington Street West

Toronto, Ontario, Canada

M5V 3J7

(305) 378-3000

New Red Canada Partnership is a general partnership organized under the laws of Ontario whose partnership interests are held either directly or indirectly by Holdings. Partnership was formed solely to effect the transactions and has not conducted any business, other than in connection with the arrangement agreement, equity financing, debt financing and related ancillary agreements to which Partnership is a party. Pursuant to the arrangement agreement, Tim Hortons and Burger King Worldwide will survive as indirect subsidiaries of Partnership. Pursuant

 

 

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to the arrangement agreement and prior to closing, Partnership will be renamed and will become a limited partnership organized under the laws of Ontario. Partnership will apply to list its Partnership exchangeable units issued as merger consideration in the transactions for trading on the TSX under the symbol [].

BLUE MERGER SUB, INC.

c/o Burger King Worldwide, Inc.

5505 Blue Lagoon Drive

Miami, Florida, USA 33126

(305) 378-3000

Blue Merger Sub, Inc. is a corporation incorporated under the laws of Delaware and a wholly owned subsidiary of Partnership. Merger Sub was formed solely to effect the transactions and has not conducted any business, other than in connection with the arrangement agreement and related ancillary agreements to which Merger Sub is a party. Pursuant to the arrangement agreement, Merger Sub will merge with and into Burger King Worldwide, with Burger King Worldwide continuing as the surviving corporation and subsidiary of Holdings and Partnership.

8997900 CANADA INC.

1600-925 West Georgia Street

Vancouver, British Columbia, Canada

V6C 3L2

(305) 378-3000

8997900 Canada Inc. is a corporation organized under the laws of Canada and a wholly owned subsidiary of Partnership. Amalgamation Sub was formed solely to effect the transactions and has not conducted any business, other than in connection with the arrangement agreement, plan of arrangement and related ancillary agreements to which Amalgamation Sub is a party. Pursuant to the arrangement agreement, Amalgamation Sub will acquire Tim Hortons pursuant to a plan of arrangement, which will result in Tim Hortons becoming a subsidiary of Holdings and Partnership.

For additional information on Tim Hortons, Burger King Worldwide, Holdings, Partnership, Merger Sub and Amalgamation Sub, see “The Companies”.

Consideration to be Received in the Transactions (page [])

If the arrangement is completed, each holder of a common share of Tim Hortons will be entitled to receive C$65.50 in cash and 0.8025 newly issued Holdings common shares (collectively, the “arrangement mixed consideration”) in exchange for each common share of Tim Hortons held by such shareholder, other than shareholders who:

 

    make an election to receive cash (a “cash election”), who will be entitled to receive C$88.50 in cash in exchange for each common share of Tim Hortons held by such shareholder (the “arrangement cash consideration”); or

 

    make an election to receive Holdings common shares (a “shares election”), who will be entitled to receive 3.0879 newly issued Holdings common shares in exchange for each share of Tim Hortons held by such shareholder (the “arrangement shares consideration”).

Any cash election or shares election is subject to proration in accordance with the plan of arrangement, as described in “The Transactions—Election and Proration Procedures; Procedures for Converting Tim Hortons Common Shares into Arrangement Consideration; Dissenter’s Rights; Withholding Rights”.

 

 

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If the merger is completed, each share of Burger King Worldwide common stock outstanding immediately prior to the effective time of the merger will be converted into the right to receive (a) if no exchangeable election (as described below) has been made, 0.99 newly issued Holdings common shares and 0.01 newly issued Partnership exchangeable units (together, the “Holdings consideration”) or (b) if the stockholder makes an election to receive consideration solely in the form of exchangeable units of Partnership (an “exchangeable election”), one Partnership exchangeable unit (the “exchangeable consideration”) in exchange for each share of Burger King Worldwide common stock, in each case subject to proration as set forth in the arrangement agreement, as described in “The Transactions—Election and Proration Procedures; Procedures for Converting Tim Hortons Common Shares into Arrangement Consideration; Dissenter’s Rights; Withholding Rights”.

Based on the number of shares of Burger King Worldwide common stock and the number of Tim Hortons common shares estimated to be outstanding immediately prior to the closing of the transactions, we estimate that, upon the closing, former Tim Hortons shareholders will own approximately 22% of the common equity of the combined company through ownership of Holdings common shares and former Burger King Worldwide stockholders will own approximately 76% of the common equity of the combined company through ownership of both Holdings common shares and Partnership exchangeable units, in each case, on a fully-diluted basis (for greater certainty, as used in the joint information statement/circular, “fully-diluted” includes “fully-exchanged”). In connection with the transactions, Berkshire Hathaway Inc. (“Berkshire”) will purchase $3 billion in Class A 9% cumulative compounding perpetual voting preferred shares of Holdings (the “preferred shares”) and a warrant to purchase Holdings common shares, which will represent 1.75% of the fully-diluted Holdings common shares, including the common shares issuable upon exercise of the warrant.

For additional information on the consideration to be received in the transactions, see “The Arrangement Agreement—Merger Consideration to Burger King Worldwide Stockholders” and “The Arrangement Agreement—Arrangement Consideration to Tim Hortons Shareholders”.

Value of Arrangement Consideration (page [])

Shares of Burger King Worldwide common stock are listed and traded on the NYSE under the symbol BKW. Tim Hortons common shares are listed and traded on the TSX and the NYSE under the symbol THI. The following table shows the closing prices of shares of Burger King Worldwide common stock as reported on the NYSE and Tim Hortons common shares as reported on the TSX on August 22, 2014, the last trading day before the public announcement of the negotiations between Burger King Worldwide and Tim Hortons, and on September 12, 2014, the last practicable day before the date of this joint information statement/circular. The table also shows the equivalent value of the consideration per Tim Hortons common share, which was calculated by adding (i) C$65.50, which is the cash portion of the consideration to be paid to Tim Hortons shareholders and (ii) the closing price of a share of Burger King Worldwide as of the specified date multiplied by the exchange ratio of 0.8025. See also “Financial Information—Comparative Per Share Market Price Data and Dividend Information”.

 

     Tim Hortons Common
Shares
     Burger King Worldwide Common
Stock
     Equivalent value of
acquisition consideration
per Tim Hortons share
 

August 22, 2014

   C$ 68.78       C$ 23.89        C$ 89.39 (1) 

August 25, 2014

   C$ 82.03       C$ 28.55        C$ 94.05 (1) 

September 12, 2014

     C$88.36       C$ 27.02         C$92.52(1)   

 

(1) Based on a USD/CAD noon exchange rate of 1.0980 reported by the Bank of Canada as of August 25, 2014.

 

 

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Risk Factors (page [])

There are a number of risk factors relating to the transactions, Tim Hortons, Burger King Worldwide and the combined companies, all of which should be carefully considered by Tim Hortons shareholders and Burger King Worldwide stockholders. For additional information regarding the risks you should consider in connection with the transactions, see “Risk Factors”.

Comparison of the Rights of Holders of Tim Hortons Common Shares, Burger King Worldwide Common Stock, Holdings Common Shares and Partnership Exchangeable Units (page [])

As a result of the arrangement, the holders of Tim Hortons common shares will become holders of Holdings common shares (to the extent they receive shares rather than cash in the arrangement). While their rights will continue to be governed by the CBCA, their rights will also be governed by the articles and by-laws of Holdings instead of Tim Hortons Articles of Incorporation, as amended, and By-Law No. 1 of Tim Hortons. Following the arrangement, former Tim Hortons shareholders will have different rights as Holdings shareholders than they did as Tim Hortons shareholders. For a summary of the material differences between the rights of Tim Hortons shareholders and Holdings shareholders, see “Comparison of Rights of Tim Hortons Shareholders and Holdings Shareholders”.

As a result of the merger, the holders of Burger King Worldwide common stock will become holders of Holdings common shares and Partnership exchangeable units and their rights will be governed by the CBCA and the articles and by-laws of Holdings, in respect of Holdings common shares, and the Limited Partnerships Act (Ontario) and the partnership agreement of Partnership, in respect of the Partnership exchangeable units, instead of Delaware General Corporation Law, which we refer to as the “DGCL” and Burger King Worldwide’s amended and restated certificate of incorporation and amended and restated bylaws. Following the merger, former Burger King Worldwide stockholders will have different rights as Holdings shareholders and Partnership exchangeable unitholders than they did as Burger King Worldwide stockholders. For a summary of the material differences between the rights of Burger King Worldwide stockholders and Holdings shareholders and Partnership exchangeable unitholders, see “Comparison of Rights of Holders of Burger King Worldwide Common Stock, Holdings Common Shares and Partnership Exchangeable Units”.

Effect of the Transactions (page [])

The following diagrams are a simplified illustration of the structure of Tim Hortons and Burger King Worldwide before and following the completion of the transactions.

Simplified structure before the completion of the transactions

 

LOGO

 

 

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Simplified Structure following completion of the Transaction

 

 

LOGO

Treatment of Tim Hortons Equity-Based Awards (page [])

Tim Hortons Stock Options. Pursuant to the arrangement, each outstanding vested Tim Hortons stock option for which a Tim Hortons optionholder has executed a surrender form (a “surrendered Tim Hortons stock option”) will be surrendered and transferred to Tim Hortons in consideration for the issuance of the number of Tim Hortons common shares, rounded down to the nearest whole share, equal in value to the in-the-money value of such surrendered Tim Hortons stock option. The in-the-money value of the Tim Hortons stock option is the amount by which the fair market value of a Tim Hortons common share exceeds the exercise price of the Tim Hortons stock option. The surrendered Tim Hortons stock options will be terminated at the time of their surrender and Tim Hortons common shares issued in respect of such surrendered stock options will be treated as described below.

Pursuant to the Arrangement, each outstanding Tim Hortons stock option (and its tandem stock appreciation right), whether vested or unvested, that is not a surrendered Tim Hortons stock option will be exchanged for a stock option (with a tandem stock appreciation right) to acquire from Holdings a number of Holdings common shares equal to the product of: (a) the number of Tim Hortons common shares subject to such Tim Hortons stock option multiplied by (b) the exchange ratio of 3.0879 (and rounded down to the nearest whole number of Holdings common shares). The exercise price per Holdings common share of such Holdings stock option shall be equal to the quotient of: (a) the exercise price per Tim Hortons common share subject to the exchanged Tim Hortons stock option divided by (b) the exchange ratio of 3.0879 (with the aggregate exercise price being

 

 

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rounded up to the nearest whole cent), provided that the in-the-money value of such Holdings stock options immediately after the issuance of such Holdings stock options may not exceed the in-the-money value of the Tim Hortons stock options immediately prior to such issuance. Subject to the foregoing, each Holdings stock option will have the same terms and conditions as were applicable to the exchanged Tim Hortons stock option.

Restricted Stock Units and Performance Stock Units. Pursuant to the arrangement, all outstanding Tim Hortons restricted stock units and performance stock units will vest, with the number of performance stock units vesting determined based on the maximum or highest level achievable, and Tim Hortons common shares will be issued in full settlement of such awards on the basis of one Tim Hortons common share for each restricted stock unit or performance stock unit.

Tim Hortons common shares issued in consideration for surrendered Tim Hortons stock options or in settlement of restricted stock unit awards and performance stock unit awards will be transferred to Amalgamation Sub pursuant to the arrangement and the holders of such Tim Hortons common shares will be entitled to make an election in respect of the arrangement consideration to be received in consideration for such transfer.

Deferred Stock Units. At the effective time of the arrangement, all outstanding Tim Hortons deferred stock units will vest and Tim Hortons will pay holders of Tim Hortons deferred stock units an amount in cash for each Tim Hortons deferred stock unit equal to C$65.50 plus the value of 0.8025 newly issued common shares of Holdings (with the value determined based on the opening price of a common share of Holdings on the NYSE on the first trading day following the effective time of the arrangement).

Treatment of Burger King Worldwide Equity-Based Awards (page [])

At the effective time of the merger, each outstanding Burger King Worldwide option will be converted into the right to receive, on the same terms and conditions as were applicable under the award agreements issued in connection with such Burger King Worldwide option (including with respect to vesting and exercise price), an option to acquire common shares from Holdings in respect of the same number of Holdings common shares as were subject to the underlying Burger King Worldwide option. At the effective time of the merger, each outstanding restricted stock unit will be converted into the right to receive, on the same terms and conditions as were applicable under such Burger King Worldwide restricted stock unit (including with respect to vesting), a restricted stock unit with respect to the same number of Holdings common shares as were subject to the underlying Burger King Worldwide restricted stock unit.

Partnership Units (page [])

Immediately following the transactions, Holdings will own a majority interest (by vote and value) in Partnership represented by common units and preferred units of Partnership which will generally entitle Holdings to distributions from Partnership that generally correspond to dividends and distributions that are paid by Holdings in respect of common shares and preferred shares of Holdings that are issued and outstanding from time to time. The balance of the partnership units of Partnership will initially be held by the former holders of Burger King Worldwide common stock in the form of newly issued exchangeable units of Partnership.

Each of the common units, preferred units and the Partnership exchangeable units will be subject to the terms of the partnership agreement. Pursuant to the terms of the partnership agreement, each Partnership exchangeable unit will be entitled to distributions from Partnership in an amount equal to any dividends or distributions that shall have been declared and be payable in respect of a common share of Holdings.

Each exchangeable unit holder will have the benefit of a voting trust agreement (the “voting trust agreement”), by and among Partnership, Holdings and a trustee to be agreed upon by Burger King Worldwide

 

 

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and Holdings (the “Trustee”). The Trustee will hold a special voting share in Holdings that entitles the Trustee to a number of votes equal to the number of Partnership exchangeable units outstanding. Pursuant to the terms of the voting trust agreement, the holders of Partnership exchangeable units can direct the Trustee, as their proxy, to vote on their behalf with respect to substantially all matters to be voted upon that are presented to the common shareholders of Holdings.

From and after the one-year anniversary of the closing date of the transactions, each holder of a Partnership exchangeable unit will have the right to require Partnership to exchange all or any portion of such holder’s Partnership exchangeable units for, at the election of Holdings, in its capacity as the general partner of Partnership, (1) cash (in an amount determined in accordance with the terms of the partnership agreement) or (2) common shares of Holdings, at a ratio of one common share of Holdings for each Partnership exchangeable unit. Prior to the one-year anniversary of the closing of the transactions, holders of Partnership exchangeable units may not require Partnership to exchange their exchangeable units. See “Post-Transactions Organizational Structure—Partnership Agreement”.

Election Procedures for Exchangeable Elections by Burger King Worldwide Stockholders (page [])

Prior to the effective time of the transactions, Burger King Worldwide will appoint the merger exchange agent for the purpose of exchanging Burger King Worldwide common stock for the applicable arrangement consideration. Concurrently with the mailing of this joint information statement/circular, an election form will be mailed to each record holder of Burger King Worldwide common stock. The election forms will permit the holder (or the beneficial owner through appropriate and customary documentation) to specify the number of shares for which such holder elects to receive the exchangeable consideration. The election must be made prior to the election deadline. The election deadline will be 5:00 p.m., New York City time, on the third business day prior to the date the transactions will close. Such date will be publicly announced by Burger King Worldwide as soon as reasonably practicable but in any event no later than five business days prior to the anticipated closing date of the merger.

To make a valid election, each record holder of Burger King Worldwide common stock (or the beneficial owner through appropriate and customary documentation) must submit a properly completed election form so that it is actually received by the merger exchange agent at or prior to the election deadline. An election form will be properly completed only if accompanied by any additional documents specified by the procedures set forth in the election form.

If a Burger King Worldwide common stockholder does not submit the election form and other required materials, the election form and other required materials are not received by the merger exchange agent by the election deadline or the election form and other required materials are improperly completed and/or are not signed, such stockholder will be deemed not to have made an election. Burger King Worldwide common stockholders not making an election will be deemed to have elected to receive the Holdings consideration.

For more information about the exchangeable unit election, see “The Transactions—Election and Proration Procedures; Exchange of Shares of Burger King Worldwide Common Stock—Exchangeable Election Procedures”.

Election Procedures for Shares Elections or Cash Elections by Tim Hortons Shareholders (page [])

Prior to the effective time of the transactions, Tim Hortons will appoint an arrangement exchange agent for the purpose of exchanging Tim Hortons common shares for the applicable arrangement consideration. Concurrently with the mailing of this joint information statement/circular, an election form and letter of transmittal will be mailed to each record holder of Tim Hortons common shares. The election form and letter of transmittal will permit the record holder (or the beneficial owner through appropriate and customary

 

 

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documentation) to specify the number of shares for which such holder makes a shares election or a cash election. The election must be made prior to the election deadline. The election deadline will be 5:00 p.m., Toronto time, on the business day which is three business days preceding the anticipated effective date of the arrangement. Tim Hortons will give at least two business days’ notice of the election deadline by news release disseminated on newswire.

To make a valid election, each Tim Hortons shareholder must submit a properly completed election form so that it is actually received by the arrangement exchange agent at or prior to the election deadline. An election form and letter of transmittal will be properly completed only if accompanied by any additional documents specified by the procedures set forth in the election form and letter of transmittal.

If a Tim Hortons shareholder does not submit the election form and letter of transmittal and other required materials, the election form and other required materials are not received by the arrangement exchange agent by the election deadline or the election form and other required materials are improperly completed and/or are not signed, such shareholder will be deemed to have elected to receive the arrangement mixed consideration.

For more information about the consideration election available to Tim Hortons shareholders, see “The Transactions—Election and Proration Procedures; Procedures for Converting Tim Hortons Common Shares into Arrangement Consideration; Dissenter’s Rights; Withholding Rights”.

Recommendation by the Tim Hortons Board of Directors (page [])

At a meeting held on August 25, 2014, the Tim Hortons board of directors unanimously determined that the arrangement was in the best interests of Tim Hortons. Accordingly, the Tim Hortons board of directors recommends that Tim Hortons shareholders vote “FOR” the arrangement resolution at the Tim Hortons special meeting.

In evaluating the arrangement, the Tim Hortons board of directors consulted with Tim Hortons senior management and with legal, financial and other advisors, reviewed a significant amount of information and considered a number of factors, conducted a comprehensive evaluation through a thorough process and concluded in its business judgment that the arrangement is expected to maintain the strong position of Tim Hortons in the QSR industry, while enhancing its future strategic opportunities beyond what Tim Hortons could achieve on a stand-alone basis. Considering the interests of all affected stakeholders, including Tim Hortons shareholders, franchisees, employees, guests, communities and Canada, the Tim Hortons board of directors determined that the arrangement is in the best interests of Tim Hortons.

In considering the recommendation of the Tim Hortons board of directors, you should be aware that directors and executive officers of Tim Hortons have interests in the proposed transaction that are in addition to, or different from, any interests they might have as shareholders. See “The Transactions—Interests of Certain Persons related to Tim Hortons in the Transactions”.

Reasons of the Burger King Worldwide Boad of Directors (page [])

The Burger King Worldwide board of directors believes that the merger and the other transactions contemplated by the arrangement agreement are in the best interests of Burger King Worldwide stockholders and Burger King Worldwide. The Burger King Worldwide board of directors has unanimously approved the merger and the entry into the arrangement agreement. For additional information relating to the Burger King Worldwide board of directors’ entry into the arrangement agreement, please refer to the information set forth in “The Transactions—Burger King Worldwide’s Reasons for the Merger”.

 

 

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Lock-up Agreements with Tim Hortons Directors (page [])

In connection with entering into of the arrangement agreement, Burger King Worldwide entered into lock-up agreements with each of the directors of Tim Hortons. As of August 26, 2014, Tim Hortons directors collectively owned less than 1% of the Tim Hortons shares. Each of the Tim Hortons directors has agreed to vote or to cause to be voted all Tim Hortons shares beneficially owned by such Tim Hortons directors as follows: (i) at the Tim Hortons special meeting (or any adjournment or postponement thereof) in favor of the arrangement and any other matter necessary for the consummation of the transactions; and (ii) against any acquisition proposal and/or any matter that could reasonably be expected to materially delay, prevent or frustrate the successful completion of the transactions at any meeting of Tim Hortons shareholders called for the purpose of considering same. As of August 26, 2014, directors of Tim Hortons collectively owned Tim Hortons shares representing less than 1% of the voting power of Tim Hortons. For a more complete discussion of the lock-up agreements, see “Lock-Up Agreements with Tim Hortons Directors”.

Opinions of Tim Hortons Financial Advisors

Citi

In connection with the transactions, Tim Hortons retained Citigroup Global Markets Inc., which is referred to as “Citi”, to render an opinion to the Tim Hortons Board of Directors with respect to fairness, from a financial point of view, of the arrangement consideration proposed to be received by the holders of Tim Hortons common shares. On August 25, 2014, at a meeting of the Tim Hortons board of directors held to evaluate the transactions, Citi rendered to the Tim Hortons board of directors an oral opinion, confirmed in a written opinion dated August 26, 2014, concerning the arrangement consideration to be received by holders of Tim Hortons common shares. The full text of Citi’s written opinion, which is attached to this joint information statement/circular as Annex G, sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken. The summary of Citi’s opinion in this joint information statement/circular is qualified in its entirety by reference to the full text of its written opinion. Citi’s opinion was provided for the information of the Tim Hortons board of directors (in its capacity as such) in its evaluation of the arrangement consideration from a financial point of view and Citi expressed no view as to, and its opinion did not address, any other aspects or implications of the transactions or the underlying business decision of Tim Hortons to effect the transactions, the relative merits of the transactions as compared to any alternative business strategies that might exist for Tim Hortons or the effect of any other transaction in which Tim Hortons might engage. Citi’s opinion is not intended to be and does not constitute a recommendation to any shareholder as to how such shareholder should vote or act on any matters relating to the proposed transactions, including whether any shareholder should elect to receive either the arrangement cash consideration or the arrangement shares consideration or make no election. With respect to such elections, Citi expressed no opinions as to the related proration mechanisms, procedures and limitations in the arrangement agreement.

Citi’s opinion speaks as of the date rendered and, as such, addressed only the fairness, from a financial point of view, of the arrangement consideration to be received in the transactions by holders of Tim Hortons common shares pursuant to the arrangement agreement.

RBC Capital Markets

In connection with the arrangement, Tim Hortons financial advisor, RBC Dominion Securities Inc., a member company of RBC Capital Markets, which we refer to as “RBC Capital Markets,” delivered an oral opinion, confirmed by delivery of a written opinion, dated August 25, 2014, to the Tim Hortons board of directors as to the fairness, from a financial point of view and as of such date, of the consideration under the arrangement to holders of Tim Hortons common shares. The full text of RBC Capital Markets’ written opinion, dated August 25, 2014, is attached as Annex H to this joint information statement/circular and sets forth, among other things, the procedures followed, assumptions made, factors considered and qualifications and limitations on the review

 

 

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undertaken by RBC Capital Markets in connection with its opinion. RBC Capital Markets delivered its opinion to the Tim Hortons board of directors for the benefit, information and assistance of the Tim Hortons board of directors (in its capacity as such) in connection with and for purposes of its evaluation of the transactions. RBC Capital Markets’ opinion addressed only the arrangement consideration from a financial point of view and did not address any other aspect of the transactions, including with respect to proration mechanisms, procedures and limitations in the arrangement agreement. RBC Capital Markets’ opinion also did not address the underlying business decision of Tim Hortons to engage in the transactions or the relative merits of the transactions compared to any alternative business strategy or transaction that might be available to Tim Hortons or in which Tim Hortons might engage. RBC Capital Markets does not express any opinion and does not make any recommendation to any shareholder of Tim Hortons as to how such shareholder should vote or act with respect to any proposal to be voted upon in connection with the arrangement or any other matter, including with respect to arrangement consideration elections.

Opinion of Burger King Worldwide Financial Advisor (page [])

Lazard Frères & Co. LLC, which is referred to as “Lazard”, rendered its oral opinion, subsequently confirmed in writing, to the board of directors of Burger King Worldwide that, as of August 25, 2014, and based upon and subject to the assumptions, procedures, factors, qualifications and limitations set forth therein, the consideration to be received by the stockholders of Burger King Worldwide (other than Holdings, Partnership, Merger Sub and affiliates of Burger King Worldwide) in the transactions was fair, from a financial point of view, to such stockholders of Burger King Worldwide.

The full text of Lazard’s written opinion, dated August 25, 2014, which sets forth the assumptions made, procedures followed, factors considered and qualifications and limitations on the review undertaken by Lazard in connection with its opinion, is attached to this joint information statement/circular as Annex I and is incorporated into this joint information statement/circular by reference. The description of Lazard’s opinion set forth in this joint information statement/circular is qualified in its entirety by reference to the full text of Lazard’s written opinion attached as Annex I. Lazard’s opinion was directed to the board of directors of Burger King Worldwide in connection with its evaluation of the transactions and only addressed the fairness as of the date of the opinion, from a financial point of view, of the consideration to be received by the stockholders of Burger King Worldwide (other than Holdings, Partnership, Merger Sub and affiliates of Burger King Worldwide) in the transactions. Lazard’s opinion was not intended to, and does not constitute, a recommendation to any stockholder of Burger King Worldwide or Tim Hortons as to how such stockholder should vote or act with respect to the transactions or any matter relating thereto. See “The Transactions—Opinion of Burger King Worldwide’s Financial Advisor”.

No Further Burger King Worldwide Stockholder Approval Required (page [])

Burger King Worldwide is not asking you to vote to approve the merger or adopt the arrangement agreement. On August 26, 2014, 3G Capital, which holds 69.22% of Burger King Worldwide’s outstanding common stock, agreed to deliver to Tim Hortons a written consent approving the merger and adopting the arrangement agreement five days following the effectiveness of the registration statement which is a part of this joint information statement/circular. This consent is sufficient for Burger King Worldwide stockholder approval of the transactions and no other vote is required.

Post Transactions Governance

Upon completion of the transactions, the Holdings board of directors will be comprised of eleven directors. Three directors of Holdings will be designated by Tim Hortons prior to the closing of the transactions. Mr. Caira has been selected by the Tim Hortons board of directors as one of Tim Hortons designees, and he is expected to serve as vice chairman of Holdings. Each of the other two director designees will be Canadian residents and must satisfy the independence requirements of the TSX and under Canadian securities laws. The remaining eight directors will be the current directors of Burger King Worldwide.

 

 

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Following the completion of the transactions, Daniel Schwartz, the current Chief Executive Officer of Burger King Worldwide, will serve as the Chief Executive Officer of Holdings, and the remainder of the executive officers of Holdings will be announced prior to the closing of the transactions.

From time to time prior to the closing of the transactions, decisions may be made with respect to the management and operations of Holdings following the completion of the transactions, including the selection of additional executive officers of Holdings. For more information, see “Post-Transactions Organizational Structure”.

Interests of Certain Persons related to Tim Hortons in the Transactions (page [])

In considering the recommendation of the Tim Hortons board of directors with respect to the transactions, Tim Hortons shareholders should be aware that the executive officers and directors of Tim Hortons have certain interests in the transactions that may be different from, or in addition to, the interests of Tim Hortons shareholders generally. The Tim Hortons board of directors was aware of these interests and considered them, among other matters, in approving the arrangement agreement and the transactions contemplated thereby, including the arrangement, and making its recommendation that the Tim Hortons shareholders adopt the arrangement agreement and approve the transactions contemplated thereby. These interests include:

 

    Upon consummation of the transactions, outstanding Tim Hortons restricted stock units and performance stock units will vest and be settled for Tim Hortons common shares (which will be exchanged for the arrangement considerations) and outstanding Tim Hortons deferred stock units will vest and be settled for cash;

 

    Outstanding Tim Hortons stock options (and their tandem stock appreciation rights) that have vested can be exercised or surrendered for Tim Hortons common shares prior to or contingent upon the consummation of the arrangement, and all outstanding Tim Hortons stock options (with tandem stock appreciations rights) that are not exercised or surrendered prior to or contingent upon the consummation of the arrangement will be converted in connection with the transactions into options to purchase Holdings common shares which, pursuant to the employment or change-in-control agreements with the executive officers, would vest upon a qualifying termination;

 

    Employment and change-in-control agreements with the executive officers of Tim Hortons provide for severance benefits in the event of certain qualifying terminations of employment following the consummation of the transactions; and

 

    The directors and executive officers of Tim Hortons are entitled to continued indemnification and insurance coverage under the arrangement agreement.

Interests of Certain Persons related to Burger King Worldwide in the Transactions (page [])

Burger King Worldwide stockholders should be aware that the executive officers and directors of Burger King Worldwide have certain interests in the transactions that may be different from, or in addition to, the interests of Burger King Worldwide stockholders generally. The Burger King Worldwide board of directors was aware of these interests and considered them, among other matters, in approving the arrangement agreement and the transactions contemplated thereby.

 

 

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Special Meeting of Tim Hortons Shareholders (page [])

The Tim Hortons special meeting will be held at the [] in Toronto, Ontario, Canada, [] on [], 2014 at [] a.m. (Toronto time) for the purpose of considering, and, if thought fit, approving with or without variation, the arrangement resolution, the full text of which is set forth in Annex C to this joint information statement/circular. The arrangement resolution requires the affirmative vote of at least 66  23% of the votes cast on the arrangement resolution by Tim Hortons shareholders present in person or represented by proxy at the Tim Hortons special meeting.

All Tim Hortons shareholders are invited to attend the Tim Hortons special meeting, including registered and beneficial shareholders of Tim Hortons. Tim Hortons has fixed [], 2014 as the record date. Only Tim Hortons shareholders of record as of the record date are entitled to vote at the Tim Hortons special meeting.

Dissent Rights (page [])

Registered Tim Hortons shareholders are expected to be entitled to exercise dissent rights under the Canada Business Corporations Act (the “CBCA”) in connection with the arrangement. If a registered Tim Hortons shareholder wishes to dissent and does so in compliance with section 190 of the CBCA, as modified by the order (the “interim order”) of the Ontario Court of Justice (Commercial List) (the “Ontario Court”) and the plan of arrangement, such shareholder will be entitled to be paid the fair value of the Tim Hortons common shares held by such shareholder. Fair value is determined as of the close of business on the day before the arrangement is approved by holders of Tim Hortons common shares. If a Tim Hortons shareholder votes in favor of the arrangement, such holder will lose his or her rights to dissent. If a Tim Hortons shareholder withholds his or her vote or votes against the arrangement, such holder preserves his or her dissent rights to the extent such holder complies with section 190 of the CBCA, as modified by the interim order and the plan of arrangement.

However, for a Tim Hortons registered shareholder to exercise dissent rights, it must also provide a separate written objection to the arrangement resolution to Tim Hortons by not later than 5:00 p.m., Toronto time, on [], 2014, being two business days preceding the Tim Hortons special meeting (or, if the Tim Hortons special meeting is postponed or adjourned, two business days preceding the date of the postponed or adjourned special meeting) and otherwise comply strictly with the relevant provisions of section 190 of the CBCA, as modified by the interim order and the plan of arrangement. If a Tim Hortons shareholder grants a proxy and intends to dissent, the proxy must instruct the proxy holder to vote against the arrangement resolution in order to prevent the proxy holder from voting such shares in favor of the arrangement and thereby voiding the Tim Hortons shareholder’s right to dissent. A Tim Hortons shareholder has no right of partial dissent. Accordingly, a holder of Tim Hortons common shares may only dissent as to all of the Tim Hortons common shares held by such shareholder. Section 190 of the CBCA is reprinted in its entirety as Annex K to this joint information statement/circular.

Anyone who is a holder of Tim Hortons shares registered in the name of an intermediary and who wishes to dissent should be aware that only registered Tim Hortons shareholders are entitled to exercise dissent rights. A registered Tim Hortons shareholder who holds Tim Hortons shares as an intermediary for one or more beneficial owners, one or more of whom wish to exercise dissent rights, must exercise such dissent rights on behalf of such holder(s).

Failure to comply strictly with the dissent procedures described in this joint information statement/circular may result in the loss of any right of dissent.

The arrangement agreement is subject to the condition in favor of Burger King Worldwide that the number of Tim Hortons shares held by Tim Hortons shareholders that have validly exercised dissent rights will not exceed nine percent of the number of Tim Hortons common shares outstanding as of August 26, 2014. If such condition is not satisfied, the arrangement and other transactions may not occur.

 

 

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Appraisal rights are statutory rights under Delaware law that enable stockholders who object to certain extraordinary transactions to demand that the corporation pay such stockholders the fair value of their shares instead of receiving the consideration offered to stockholders in connection with the extraordinary transaction. However, appraisal rights are not available in all circumstances. Burger King Worldwide stockholders do not have appraisal rights under the DGCL with respect to the merger.

Regulatory Approvals Required (page [])

HSR Clearance

Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, which we refer to as the “HSR Act,” and the rules and regulations promulgated thereunder by the Federal Trade Commission, which we refer to as the “FTC,” the transactions cannot be consummated until (i) all required notices and filings under the HSR Act are submitted to the FTC and the Antitrust Division of the U.S. Department of Justice, which we refer to as the “Antitrust Division,” and (2) the HSR waiting period expires or is otherwise terminated.

Burger King Worldwide and Tim Hortons each expect to file a pre-merger notification and report form pursuant to the HSR Act with the Antitrust Division and the FTC on or before September 17, 2014. The HSR waiting period will expire 30 days after both parties’ Notification and Report Forms are accepted, unless early terminated. The FTC or Antitrust Division may, however, request additional information and documentary material (the “Second Request”) relating to the proposed transactions. If a Second Request is issued, the issuing antitrust agency may, at its discretion, extend the relevant waiting period up to 30 days after the parties substantially comply with the Second Request.

Competition Act (Canada)

Part IX of the Competition Act (Canada), as amended, including the regulations promulgated thereunder, which we refer to as the “Competition Act (Canada),” requires that the parties to certain transactions that exceed the thresholds set out in sections 109 and 110 of the Competition Act (Canada), which are referred to as “notifiable transactions,” provide the Commissioner of Competition, which person we referred to as the “commissioner,” with pre-closing notice of the transactions. Subject to certain limited exceptions, the parties to a notifiable transaction cannot complete the transaction until an applicable waiting period has expired or been terminated or an appropriate waiver has been provided by the commissioner.

In addition or as an alternative to filing the prescribed information with the commissioner, a party to a notifiable transaction may comply with Part IX by applying to the commissioner for: (i) an advance ruling certificate issued by the commissioner pursuant to section 102 of the Competition Act (Canada), which we refer to as an “advance ruling certificate;” or (ii) a no-action letter from the commissioner advising that he does not have grounds, at the time, on which to initiate proceedings before the Competition Tribunal under section 92 of the Competition Act (Canada) to challenge the transactions and seek an order in respect of the transactions which we refer to as a “no-action letter,” and an exemption from the pre-merger notification obligation under paragraph 113(c) of the Competition Act (Canada).

The transactions contemplated by the arrangement agreement (including the arrangement and the merger) are a notifiable transaction under the Competition Act (Canada), and as such, the parties to the arrangement agreement must comply with the Part IX merger notification provisions.

The parties to the arrangement agreement expect to file with the commissioner a request for an advance ruling certificate or no-action letter and their notifications within the timeframes prescribed by the arrangement agreement. As of the date of this joint information statement/circular, the Competition Act (Canada) approval required pursuant to the arrangement agreement has not been obtained.

 

 

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Canada Transportation Act

Under the Canada Transportation Act (the “Canada Transportation Act”), a transaction subject to pre-merger notification under the Competition Act (Canada) that involves a transportation undertaking cannot be completed until certain information has been provided to the Minister of Transport of Canada, who we refer to as the “Minister of Transport”, and either the Minister of Transport notifies the parties that she is of the opinion that the transaction does not raise issues with respect to the public interest or the transaction is approved by the Governor in Council of Canada.

The parties to the arrangement agreement expect to file an application with the Minister of Transport for a notice confirming that the transactions contemplated by the arrangement agreement do not raise issues with respect to the public interest as relates to national transportation. As of the date of this joint information statement/circular, the Canada Transportation Act approval required pursuant to the arrangement agreement has not been obtained.

Investment Canada Act

Under the Investment Canada Act, as amended, including the regulations promulgated thereunder, which we refer to as the “Investment Canada Act”, certain transactions involving the “acquisition of control” of a Canadian business by a non-Canadian are subject to review and cannot be implemented unless the Minister of Industry is satisfied that the transaction is likely to be of “net benefit” to Canada. Such a transaction is referred to herein as a “reviewable transaction.” The transactions contemplated by the arrangement agreement constitute a reviewable transaction under the Investment Canada Act.

Pursuant to the arrangement agreement, Investment Canada Act approval will be obtained if the responsible minister under the Investment Canada Act is satisfied or deemed to be satisfied that the transactions contemplated by the arrangement agreement are likely to be of “net benefit” to Canada pursuant to the Investment Canada Act and such approval has not been modified or withdrawn.

An application for review was filed with the Investment Review Division of Industry Canada on September 11, 2014. As of the date of this joint information statement/circular, the Investment Canada Act approval required pursuant to the arrangement agreement has not been obtained.

Listing of Holdings Common Shares and Partnership Exchangeable Units (page [])

It is a mutual condition to the completion of the arrangement that the Holdings common shares be approved for listing on the NYSE and conditionally approved for listing on the TSX. Holdings will apply to list the Holdings shares to be issued or made issuable pursuant to the arrangement and the merger on the NYSE and the TSX. Listing on each exchange will be subject to Holdings fulfilling all the listing requirements of the NYSE and the TSX, as applicable.

It is also a mutual condition to the completion of the arrangement that the Partnership exchangeable units be conditionally approved for listing on the TSX. Partnership will apply to list the Partnership exchangeable units to be issued or made issuable pursuant to the merger on the TSX. Listing will be subject to Partnership fulfilling all the listing requirements of the TSX.

Burger King Worldwide common stock and Tim Hortons common shares will be delisted from the NYSE and the TSX, as applicable, following the completion of the transactions.

 

 

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Conditions to the Completion of the Transactions (page [])

The completion of the transactions depends upon the satisfaction or waiver of a number of conditions, all of which, to the extent permitted by applicable laws, may be waived by Burger King Worldwide and/or Tim Hortons, as applicable.

The following conditions must be satisfied or mutually waived before Burger King Worldwide or Tim Hortons is obligated to complete the arrangement:

 

    Tim Hortons shareholders will have approved the arrangement at the Tim Hortons special meeting;

 

    each of the interim order and the order of the Ontario court approving the arrangement (the “final order”) shall have been obtained from the Ontario court on terms consistent with the arrangement agreement and the final order will not have been set aside or modified in a manner unacceptable to either Tim Hortons or Burger King Worldwide, each acting reasonably, on appeal or otherwise;

 

    the registration statement of which this joint information statement/circular is a part shall be effective, and no stop order suspending the effectiveness of such registration statement will be in effect and no similar action in respect of the management proxy circular shall have been initiated or threatened by the SEC and not concluded or withdrawn;

 

    the Holdings common shares will have been approved for listing on the NYSE, subject only to official notice of issuance, and conditionally approved for listing on the TSX, subject only to the satisfaction of customary listing conditions of the TSX;

 

    the Partnership exchangeable units will have been conditionally approved for listing on the TSX, subject only to the satisfaction of customary listing conditions of the TSX;

 

    approvals under the HSR Act, the Competition Act (Canada), the Canada Transportation Act and the Investment Canada Act will have been obtained and any waiting or suspensory periods related to such approvals shall have expired or been terminated, in each case, without the imposition of any law or order which has the effect of enjoining, restraining, prohibiting or otherwise preventing the consummation of the transactions;

 

    no governmental authority of competent jurisdiction shall have enacted any law or order (whether temporary, preliminary or permanent) that prevents the consummation of the transactions contemplated by the arrangement agreement; and

 

    the information statement that is a part of this joint information statement/circular will have been mailed to Burger King Worldwide stockholders at least 20 business days prior to the closing date of the arrangement.

The obligations of Tim Hortons to complete the arrangement are also conditioned on the satisfaction or waiver of the following conditions:

 

    Burger King Worldwide and the other parties to the arrangement agreement (other than Tim Hortons) shall have complied in all material respects with their respective obligations, covenants and agreements in the arrangement agreement to be performed and complied with on or before the closing date of the arrangement;

 

    as of the date of the arrangement agreement and as of the closing date of the arrangement, certain representations and warranties made by Burger King Worldwide and Holdings in the arrangement agreement relating to capitalization shall be true and correct in all but de minimis respects;

 

 

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    as of the date of the arrangement agreement and as of the closing date of the arrangement, certain representations and warranties made by Burger King Worldwide and Holdings in the arrangement agreement relating to authority, takeover statutes, voting requirements and prior operations shall be true and correct in all material respects;

 

    as of the date of the arrangement agreement and as of the closing date of the arrangement, the representation and warranty made by Burger King Worldwide in the arrangement agreement relating to the absence of certain changes shall be true and correct in all respects;

 

    the remaining representations and warranties made by Burger King Worldwide and Holdings in the arrangement agreement shall be true and correct in all respects (without giving effect to any materiality or material adverse effect qualifications) as of the closing date of the arrangement (other than representations and warranties which by their terms are made as of a specific date, which will be accurate as of such date), except for breaches of representations and warranties which have not had and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on Burger King Worldwide;

 

    Tim Hortons shall have received (i) a certificate dated the closing date of the arrangement and validly executed by a senior officer of Burger King Worldwide to the effect that the foregoing conditions have been satisfied and (ii) a certificate dated the closing date of the arrangement and validly executed by a senior officer of Holdings to the effect that the foregoing conditions in the first five bullet points have been satisfied;

 

    the written consent of the shareholders of Burger King Worldwide will have been delivered to Burger King Worldwide and Tim Hortons in accordance with the Burger King Worldwide voting agreement; and

 

    since the date of the arrangement agreement, no fact, circumstance, change, effect, event or occurrence has occurred that has had or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on Burger King Worldwide.

The obligations of Burger King Worldwide and the other parties to the arrangement agreement (other than Tim Hortons) to complete the arrangement are also conditioned on the satisfaction or waiver of the following conditions:

 

    Tim Hortons shall have complied in all material respects with its obligations, covenants and agreements in the arrangement agreement to be performed and complied with on or before the closing date of the arrangement, other than its covenant to provide financing cooperation to Burger King Worldwide and assist in commencing any debt tender offers and redemptions;

 

    as of the date of the arrangement agreement and as of the closing date of the arrangement, certain representations and warranties made by Tim Hortons in the arrangement agreement relating to capitalization shall be true and correct in all but de minimis respects;

 

    as of the date of the arrangement agreement and as of the closing date of the arrangement, certain representations and warranties made by Tim Hortons in the arrangement agreement relating to the Tim Hortons Shareholder Rights Plan Agreement, dated August 6, 2009, between Tim Hortons and Computershare Trust Company of Canada, authority, takeover statutes, voting requirements, brokers and opinions of financial advisors shall be true and correct in all material respects;

 

    as of the date of the arrangement agreement and as of the closing date of the arrangement, the representation and warranty made by Tim Hortons in the arrangement agreement relating to the absence of certain changes shall be true and correct in all respects;

 

 

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    the remaining representations and warranties made by Tim Hortons in the arrangement agreement shall be true and correct in all respects (without giving effect to any materiality or material adverse effect qualifications) as of the closing date of the arrangement (other than representations and warranties which by their terms are made as of a specific date, which will be accurate as of such date), except for breaches of representations and warranties which have not had and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on Tim Hortons;

 

    since the date of the arrangement agreement, no fact, circumstance, change, effect, event or occurrence has occurred that has had or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on Tim Hortons;

 

    Burger King Worldwide will have received a certificate dated the closing date of the arrangement and validly executed by a senior officer of Tim Hortons to the effect that the foregoing conditions have been satisfied;

 

    the number of Tim Hortons common shares held by Tim Hortons shareholders that have validly exercised dissent rights shall not exceed 9% of the number of Tim Hortons common shares outstanding as of the date of the arrangement agreement; and

 

    if requested by Burger King Worldwide in accordance with the arrangement agreement, Tim Hortons shall have undertaken the distribution by Tim Hortons US LLC (“Tim Hortons US”) of its common shares of The TDL Group Co. to Tim Hortons Delaware Limited Partnership in liquidation of Tim Hortons US.

Financing (page [])

Burger King Worldwide estimates that the total amount of funds necessary to complete the transactions and pay related fees and expenses will be approximately $424.7 million. Burger King Worldwide and Holdings have entered into a debt commitment letter, which we refer to as the “debt commitment letter”, pursuant to which JPMorgan Chase Bank, N.A. and Wells Fargo Bank, National Association have, among other things, agreed to provide:

 

    a senior secured term loan facility in an aggregate principal amount of $6,750 million;

 

    a senior secured revolving credit facility in an aggregate principal amount of $500 million; and

 

    a senior secured second lien bridge facility in an aggregate principal amount of up to $2,250 million (less the gross proceeds of any senior secured second-lien notes issued in connection with the consummation of the transactions under the arrangement agreement) (collectively, the “debt financing”).

The funding of the debt financing is contingent on the closing of the arrangement and certain other conditions set forth in the debt commitment letter.

Burger King Worldwide also expects to finance the transactions through an equity issuance by Holdings to Berkshire Hathaway, Inc. (“Berkshire”). In connection with the transactions, Berkshire and Holdings entered into a securities purchase agreement (the “securities purchase agreement”) pursuant to which Berkshire agreed to purchase from Holdings, upon the terms and subject to the conditions set forth therein for an aggregate purchase price of $3 billion the following equity interests in Holdings:

 

    30,000 preferred shares; and

 

    a warrant to purchase Holdings common shares representing 1.75% of the fully-diluted common shares of Holdings as of the closing of the transactions, including after taking into account the common shares of Holdings underlying the warrant.

 

 

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Burger King Worldwide is a third party beneficiary under the securities purchase agreement for purposes of specifically enforcing the terms and provisions thereunder under certain circumstances.

For a more complete description of Burger King Worldwide’s financing for the transactions, see the section entitled “The Transactions—Financing for the Transactions”.

Material Income Tax Consequences of the Transactions (page [])

For a summary of the material U.S. federal income tax considerations applicable to Burger King Worldwide stockholders in connection with the merger and the material U.S. federal income tax considerations applicable to Tim Hortons shareholders in connection with the arrangement, see “The Transactions—Material U.S. Federal Income Tax Consequences of the Transactions” for the arrangement. Such summary is not intended to be legal or tax advice to any particular Burger King Worldwide stockholder or Tim Hortons shareholder. Burger King Worldwide stockholders and Tim Hortons shareholders should consult their own tax and legal advisors with respect to their particular circumstances.

For a summary of the material Canadian federal income tax considerations applicable to Burger King Worldwide stockholders in connection with the merger and the material Canadian federal income tax considerations applicable to Tim Hortons shareholders in connection with the arrangement, see “The Transactions Material Canadian Federal Income Tax Consequences of the Transactions”. Such summary is not intended to be legal or tax advice to any particular Burger King Worldwide stockholder or Tim Hortons shareholder. Burger King Worldwide stockholders and Tim Hortons shareholders should consult their own tax and legal advisors with respect to their particular circumstances.

Accounting Treatment (page [])

The holding company acquisition will be accounted for as a business combination of Tim Hortons using the acquisition method of accounting in accordance with ASC 805, Business Combinations, and, accordingly, will generally result in the recognition of Tim Hortons assets acquired and liabilities assumed at fair value. However, as of the date of this joint information statement/circular, we have not performed the valuation studies necessary to estimate the fair values of the assets we will acquire and the liabilities we will assume necessary to reflect the allocation of purchase price to the fair value of such amounts. The excess of the consideration transferred over the net assets acquired reflected in the unaudited pro forma condensed consolidated financial statements has been allocated to intangible assets (i.e., indefinite-lived trade names and definite-lived franchise agreements) and goodwill. A final determination of these fair values will reflect appraisals prepared by independent third-parties and will be based on the actual tangible and intangible assets and liabilities that existed as of the acquisition date. The actual allocation of the consideration transferred will differ from the allocation assumed in these unaudited pro forma condensed consolidated financial statements and may result in adjustments to the unaudited pro forma condensed consolidated financial information. See “The Transactions—Accounting Treatment of the Transactions” for further information.

 

 

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Termination of the Arrangement Agreement (page [])

The arrangement agreement may be terminated at any time prior to the closing of the transactions in the following ways:

 

    by mutual written consent of Burger King Worldwide and Tim Hortons;

 

    by either Burger King Worldwide or Tim Hortons if the closing of the arrangement shall not have occurred by March 31, 2015 (or April 30, 2015, if so extended by either Burger King Worldwide or Tim Hortons if all conditions except for the receipt of all required approvals from governmental authorities have been satisfied) (the “outside date”), except that the right to so terminate the arrangement agreement will not be available to Burger King Worldwide or Tim Hortons if its failure to fulfill any obligation under the arrangement agreement has been a principal cause of or resulted in the failure of the closing of the arrangement to occur by such date;

 

    by either Burger King Worldwide or Tim Hortons if the requisite vote for approval of the arrangement resolution by the Tim Hortons shareholders shall not have been obtained at the Tim Hortons special meeting;

 

    by either Burger King Worldwide or Tim Hortons if any governmental authority of competent jurisdiction shall have issued a law or order or taken any other action restraining, enjoining or otherwise prohibiting the arrangement or the merger and such order or other action shall have become final and nonappealable;

 

    by Burger King Worldwide, (i) if prior to the time approval by Tim Hortons shareholders is obtained, the Tim Hortons board of directors changes its recommendation to approve the arrangement, (ii) if Tim Hortons breaches any of its representations, warranties, covenants or other agreements contained in the arrangement agreement, which breach or failure would render the conditions precedent to Burger King Worldwide’s obligations under the arrangement agreement not to be satisfied by the outside date or by its nature cannot be cured within that time, and Burger King Worldwide is not in breach of any of the conditions precedent to Tim Hortons obligations to close under the arrangement agreement, or (iii) if the Burger King Worldwide voting agreement is not duly executed and delivered to Tim Hortons and Burger King Worldwide within 24 hours after the execution of the arrangement agreement; or

 

    by Tim Hortons, (i) if prior to the time approval by Tim Hortons shareholders is obtained, to permit Tim Hortons to enter into an agreement providing for a “superior proposal” and Tim Hortons immediately prior to or simultaneously with such termination pays to Burger King Worldwide any fees required to be paid to Burger King Worldwide as described below, (ii) if the written consent of the Burger King Worldwide stockholders is not duly executed and delivered to Tim Hortons and Burger King Worldwide in accordance with the Burger King Worldwide voting agreement within five business days after the effectiveness of this joint information statement/circular, or (iii) if Burger King Worldwide or any of its affiliates party to the arrangement agreement breaches any of its representations, warranties, covenants or other agreements contained in the arrangement agreement, which breach or failure would render the conditions precedent to Tim Hortons obligations under the arrangement agreement not to be satisfied by the outside date or by its nature cannot be cured within that time, and Tim Hortons is not in breach of any of the conditions precedent to Burger King Worldwide’s obligations to close under the arrangement agreement.

 

 

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Termination Fees; Effect of Termination (page [])

The arrangement agreement further provides that Burger King Worldwide must pay a termination fee of C$500 million to Tim Hortons if the arrangement agreement is terminated:

 

    by Tim Hortons or Burger King Worldwide because the transactions are not completed by the outside date due to the failure to obtain the approval required by the Investment Canada Act, or there is a permanent injunction or final, non-appealable governmental order or action, in each case related to the Investment Canada Act, prohibiting completion of the transactions if, at the time of such termination, all other closing conditions have been satisfied or waived or are capable of being satisfied; or

 

    by Burger King Worldwide due to a permanent injunction or final, non-appealable governmental order or action, in each case related to the Investment Canada Act, prohibiting completion of the transactions.

Tim Hortons must pay a termination fee of C$345 million to Burger King Worldwide if the Arrangement Agreement is terminated:

 

    by Tim Hortons to enter into an alternative acquisition agreement for a “company superior proposal” (as described in this joint information statement/circular);

 

    by Burger King Worldwide because the board of directors of Tim Hortons has changed its recommendation regarding the arrangement; or

 

    by either Burger King Worldwide or Tim Hortons because the transactions are not completed by the outside date or the approval of Tim Hortons shareholders is not obtained, or by Burger King Worldwide due to a breach by Tim Hortons of its representations, warranties or covenants as described above, in each case, if (1) prior to such termination, an acquisition proposal was publicly made for Tim Hortons and not withdrawn and (2) prior to the 12-month anniversary of the termination of the arrangement agreement, Tim Hortons consummates an alternative transaction.

Additionally, in the event that either Tim Hortons or Burger King Worldwide terminates the arrangement agreement as a result of the failure by the shareholders of Tim Hortons to approve the arrangement, Tim Hortons must make an expense reimbursement payment of C$40 million to Burger King Worldwide.

 

 

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Comparative Per Share Market Price Data and Dividend Information (page [])

The following table sets forth, for the calendar quarters indicated, the high and low sales prices per share of shares of Burger King Worldwide common stock, as reported on the NYSE, and of Tim Hortons common shares, as reported on the NYSE and the TSX.

 

     NYSE Burger King Worldwide      NYSE Tim
Hortons
     TSX Tim Hortons  
     High
    (U.S. $)    
     Low
    (U.S. $)    
     High
(U.S.
$)
     Low
(U.S. $)
     High
(C $)
     Low
(C $)
 

For the quarterly period:

                 

2012

                 

First Quarter

     N/A         N/A       $ 55.31       $ 46.55       $ 54.92       $ 47.36   

Second Quarter

   $ 15.85       $ 14.97       $ 58.47       $ 50.43       $ 57.91       $ 56.90   

Third Quarter

   $ 15.88       $ 13.03       $ 55.02       $ 49.59       $ 55.73       $ 49.62   

Fourth Quarter

   $ 17.74       $ 14.10       $ 53.91       $ 45.41       $ 52.60       $ 45.11   

2013

                 

First Quarter

   $ 19.95       $ 16.26       $ 54.62       $ 47.76       $ 55.50       $ 47.83   

Second Quarter

   $ 21.00       $ 17.90       $ 58.01       $ 51.86       $ 58.85       $ 53.25   

Third Quarter

   $ 20.42       $ 18.97       $ 59.72       $ 53.74       $ 61.52       $ 56.06   

Fourth Quarter

   $ 22.86       $ 18.91       $ 61.46       $ 56.77       $ 64.18       $ 58.67   

2014

                 

First Quarter

   $ 27.97       $ 22.03       $ 58.47       $ 50.67       $ 62.80       $ 56.11   

Second Quarter

   $ 27.29       $ 24.66       $ 56.67       $ 53.76       $ 62.38       $ 57.76   

Third Quarter (through September 12, 2014)

   $ 34.20         25.93       $ 82.16         54.24         89.99         57.91   

The following table sets forth, for the months indicated, the high and low sales prices per share of shares of Burger King Worldwide common stock, as reported on the NYSE, and of Tim Hortons common shares, as reported on the NYSE and the TSX. In addition, the table also sets forth the average daily trading volume of the relevant security on such exchange.

 

     NYSE Burger King Worldwide      NYSE Tim Hortons      TSX Tim Hortons  
     High
(U.S. $)
     Low
(U.S. $)
     Average
Volume
     High
(U.S. $)
     Low
(U.S. $)
     Average
Volume
     High
(C$)
     Low
(C$)
     Average
Volume
 

For the monthly period:

                          

2013

                          

July

     19.85         18.75         529,014         58.19         53.74         325,391         59.79         56.03         651,430   

August

     20.06         19.09         265,723         59.72         54.64         341,882         61.52         57.39         733,076   

September

     20.18         18.99         662,745         58.34         54.74         246,340         60.18         57.54         637,900   

October

     20.93         18.75         564,978         61.46         56.77         165,848         64.18         58.67         604,907   

November

     21.12         20.10         1,325,825         60.51         57.93         256,775         63.48         61.11         618,502   

December

     22.67         20.61         658,729         59.48         57.06         224,105         63.25         60.63         712,595   

2014

                          

January

     24.13         22.03         781,114         58.47         51.19         271,424         62.05         57.20         712,893   

February

     26.45         24.01         857,963         54.75         50.67         412,437         60.50         56.11         793,408   

March

     27.52         25.78         930,438         56.83         53.41         256,681         62.80         59.00         960,807   

April

     26.74         24.94         655,495         56.67         54.20         214,419         62.38         59.43         666,997   

May

     26.28         24.92         456,438         55.30         53.76         199,257         60.40         58.35         945,953   

June

     27.18         25.39         382,948         55.68         53.88         128,367         59.97         57.76         651,283   

July

     27.34         26.05         376,536         56.32         54.38         136,200         61.24         57.89         540,560   

 

 

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The table below sets forth, for the calendar quarters indicated, quarterly dividends paid per Tim Hortons common share, in Canadian dollars per share and in U.S. dollars per share (calculated using the Bank of Canada nominal noon exchange rate on the date Tim Hortons paid the applicable dividend). On [], the Tim Hortons record date, there were [] Tim Hortons common shares outstanding. Tim Hortons pays quarterly dividends with respect to its common shares.

 

     Date Paid      C$ Per Share      C$ / $ Exchange
Rate on Date
Paid(1)
     $ Per
Share
 

2012

           

Quarter ended April 4

     03/20/12       $ 0.21       $ 1.0067       $ 0.21   

Quarter ended July 4

     06/08/12       $ 0.21       $ 0.9679       $ 0.20   

Quarter ended September 30

     09/05/12       $ 0.21       $ 1.0099       $ 0.21   

Quarter ended December 30

     12/12/12       $ 0.21       $ 1.0148       $ 0.21   

2013

           

Quarter ended March 31

     03/19/13       $ 0.26       $ 0.9733       $ 0.25   

Quarter ended June 30

     06/07/13       $ 0.26       $ 0.9794       $ 0.25   

Quarter ended September 29

     09/04/13       $ 0.26       $ 0.9540       $ 0.25   

Quarter ended December 29

     12/10/13       $ 0.26       $ 0.9414       $ 0.24   

2014

           

Quarter ended March 30, 2014

     03/18/14       $ 0.32       $ 0.9020       $ 0.29   

Quarter ended June 30, 2014

     06/05/14       $ 0.32       $ 0.9146       $ 0.29   

Quarter ended September 28, 2014

     09/03/14       $ 0.32       $ 0.9197       $ 0.29   

Quarter ended December 28, 2014 (through [], 2014)

      $ []       $ []       $ []   

Tim Hortons declares and pays dividends in Canadian dollars, eliminating the foreign exchange exposure for its shareholders ultimately receiving Canadian dollars. For U.S. beneficial shareholders, however, CDS Clearing and Depository Services Inc. (“CDS”) converts, and for U.S. registered shareholders, Tim Hortons converts, the Canadian dividend amounts into U.S. dollars based on exchange rates prevailing at the time of conversion and pay such dividends in U.S. dollars. Shareholders ultimately receiving U.S. dollars are exposed to foreign exchange risk from the date the dividend is declared until the date CDS or Tim Hortons, as applicable, convert the dividend payment to U.S. dollars.

On August 22, 2014, the last trading day before the public announcement of the negotiations between Burger King Worldwide and Tim Hortons, the closing sale price per Tim Hortons common share was $62.84 on the NYSE and C$68.78 on the TSX. On September 12, 2014, the latest practicable date before the date of this joint information statement/circular, the closing sale price per Tim Hortons common share was $79.67 on the NYSE and C$88.36 on the TSX.

 

 

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The table below sets forth, for the calendar quarters indicated, quarterly dividends paid per share of Burger King Worldwide common stock. On [], the latest practicable date prior to the mailing of this joint information statement/circular, there were [] shares of Burger King Worldwide common stock outstanding. Burger King Worldwide pays quarterly dividends with respect to its common stock.

 

     Date Paid      $ Per Share  

2012

     

Quarter ended December 31

     11/29/12       $ 0.04   

2013

     

Quarter ended March 31

     03/15/13       $ 0.05   

Quarter ended June 30

     05/15/13       $ 0.06   

Quarter ended September 30

     08/30/13       $ 0.06   

Quarter ended December 31

     11/26/13       $ 0.07   

2014

     

Quarter ended March 31, 2014

     03/12/14       $ 0.07   

Quarter ended June 30, 2014

     05/27/14       $ 0.07   

Quarter ended September 30, 2014

     08/26/14       $ 0.08   

Quarter ended December 31, 2014 (through [], 2014)

      $ []   

On August 22, 2014, the last trading day before the public announcement of the negotiations between Burger King Worldwide and Tim Hortons, the closing sale price per share of Burger King Worldwide common stock was $27.11 on the NYSE. On September 12, 2014, the latest practicable date before the date of this joint information statement/circular, the closing sale price per share of Burger King Worldwide common stock was $30.67 on the NYSE.

For further information, see “Financial Information.”

Summary of Financial Information (page [])

Certain historical consolidated financial information of Tim Hortons is presented in this joint information statement/circular to assist Tim Hortons shareholders in their analysis of the financial aspects of the transactions. The selected historical consolidated financial data has been derived from the Tim Hortons audited consolidated financial statements for the years ended December 29, 2013, December 30, 2012, which are incorporated herein by reference, and for the years ended January 1, 2012, January 2, 2011 and January 3, 2010. The selected condensed consolidated statement of operations data for the six moths ended June 30, 2013 and June 29, 2014, and the selected condensed consolidated balance sheet data as of June 29, 2014 have been derived from the Tim Hortons unaudited condensed consolidated financial statements incorporated herein by reference.

Certain selected consolidated financial information of Burger King Worldwide are presented in this joint information statement/circular. The selected historical financial data as of December 31, 2013 and December 31, 2012 and for 2013, 2012, 2011 and 2010 and for the period from October 19, 2010 to December 31, 2010 have been derived from Burger King Worldwide’s audited consolidated financial statements and notes thereto. The selected historical financial data as of June 30, 2010 and June 30, 2009 and for the period July 1, 2010 to October 18, 2010 and for fiscal 2010 and 2009 have been derived from the audited consolidated financial statements and the notes thereto. The selected financial information for the six months ended June 30, 2014 and 2013 has been derived from Burger King Worldwide’s unaudited consolidated financial statements.

Pro forma financial information of Holdings is presented in this joint information statement/circular for illustrative purposes only. The pro forma financial information has been derived from (i) the audited consolidated

 

 

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financial statements of Burger King Worldwide as of and for the fiscal year ended December 31, 2013, which have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and included elsewhere in this joint information statement/circular, (ii) the audited consolidated financial statements of Tim Hortons as of and for the fiscal year ended December 29, 2013, which have been prepared in accordance with GAAP and are included elsewhere in this joint information statement/circular and (iii) the unaudited consolidated financial statements of Burger King Worldwide and Tim Hortons for the six month periods ended June 30, 2014 and June 29, 2014, respectively, which have been prepared in accordance with GAAP and are included elsewhere in this joint information statement/circular.

For more information, see “Financial Information” and “Where You Can Find More Information”.

 

 

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RISK FACTORS

Shareholders of Tim Hortons and stockholders of Burger King Worldwide should carefully consider the following risk factors in connection with their consideration of the arrangement and the merger. Such risks may not be the only risks arising in connection with the transactions or facing Tim Hortons, Burger King Worldwide and each of their respective subsidiaries. Additional risks and uncertainties not presently known may also materially and adversely affect the business, operations, financial condition or prospects of Tim Hortons, Burger King Worldwide and each of their respective subsidiaries.

Factors Relating to the Transactions

The arrangement agreement may be terminated in accordance with its terms and the transactions may not be completed.

The arrangement agreement contains a number of conditions that must be fulfilled to complete the transactions. Those conditions include, among other customary conditions, the approval of the arrangement resolution by Tim Hortons shareholders, the approval of the arrangement by the Ontario court, receipt of requisite regulatory approvals, absence of orders prohibiting consummation of the transactions, effectiveness of the registration statement of which this document is a part, approval of the Holdings common shares for listing on the NYSE and conditional approval for listing on the TSX and conditional approval of the Partnership exchangeable units for listing on the TSX. These conditions to the closing of the transactions may not be fulfilled and, accordingly, the transactions may not be completed. In addition, if the transactions are not completed by March 31, 2015 (subject to extension to April 30, 2015, if the only conditions not satisfied or waived (other than those conditions that by their nature are to be satisfied at the closing, which conditions shall be capable of being satisfied) are conditions relating to regulatory approvals and the absence of any orders relating to regulatory approvals), either Tim Hortons or Burger King Worldwide may choose to terminate the arrangement agreement. In addition, Tim Hortons or Burger King Worldwide may elect to terminate the arrangement agreement in certain other circumstances, and the parties can mutually decide to terminate the arrangement agreement at any time prior to the closing, before or after shareholder or stockholder approval, as applicable. See “The Arrangement Agreement—Termination of the Arrangement Agreement” and “—Termination Fees” for a more detailed description of these circumstances.

Failure to complete the transactions could negatively impact the share prices and the future business and financial results of either or both of Tim Hortons and Burger King Worldwide.

If the transactions are not completed, the ongoing businesses of either or both of Tim Hortons and Burger King Worldwide may be adversely affected. Additionally, if the transactions are not completed and the arrangement agreement is terminated, in certain circumstances, either Tim Hortons may be required to pay to Burger King Worldwide a termination fee of C$345 million or Burger King Worldwide may be required to pay to Tim Hortons a termination fee of C$500 million. In addition, Tim Hortons and Burger King Worldwide may incur significant transaction expenses in connection with the transactions regardless of whether the transactions are completed. The foregoing risks, or other risks arising in connection with the failure of the transactions, including the diversion of management attention from conducting the business of the respective company and pursuing other opportunities during the pendency of the transactions, may have a material adverse effect on the businesses, operations, financial results and share and stock prices of Tim Hortons and Burger King Worldwide. In addition, either of Tim Hortons or Burger King Worldwide could be subject to litigation related to any failure to consummate the transactions or any related action that could be brought to enforce a party’s obligation under the arrangement agreement.

Tim Hortons shareholders may receive a portion of their consideration in a different form from what they elect.

As a result of the arrangement, each issued and outstanding common share of Tim Hortons (including shares issued in settlement of outstanding options, restricted stock units and performance stock units), other than

 

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dissenting shares, will be converted into the right to receive the arrangement mixed consideration of 0.8025 Holdings common shares and C$65.50 in cash. Alternatively, Tim Hortons shareholders will have the right to make a cash election to receive the cash consideration of C$88.50 in cash, or a shares election to receive the arrangement shares consideration of 3.0879 Holdings common shares, for each of their Tim Hortons common shares.

Although each Tim Hortons shareholder may elect to receive all cash or all Holdings common shares in the arrangement, both the cash election and the shares election are subject to a proration procedure as set forth in the plan of arrangement. The pool of cash and the number of Holdings common shares available for all Tim Hortons shareholders will be fixed at the aggregate amount of cash that would have been paid, and the aggregate number of Holdings common shares that would have been issued, to all of the holders of Tim Hortons common shares had the election to receive the arrangement mixed consideration been made with respect to each Tim Hortons common share (i.e., the aggregate number of Holdings common shares required to provide each Tim Hortons shareholder with 0.8025 Holdings common shares and the aggregate amount of cash required to provide each Tim Hortons shareholder with C$65.50 in cash). As a result, if the aggregate number of shares with respect to which either cash elections or shares elections have been made would otherwise result in payments of cash or shares in excess of the maximum amount of cash or number of shares available, and a Tim Hortons shareholder has chosen the consideration election that exceeds the maximum available, such Tim Hortons shareholder will receive consideration in part in a form that such shareholder did not elect.

The mix of consideration payable to Tim Hortons shareholders who make cash elections or shares elections, giving effect to the proration procedure, will not be known until Holdings tallies the results of the elections made by Tim Hortons shareholders, which will not occur until shortly prior to the closing of the arrangement. As a result, Tim Hortons shareholders who make cash elections or shares elections cannot determine the exact amount of cash and the exact number of Holdings common shares that they will receive in the arrangement prior to making an election. This could result in, among other things, tax consequences that differ from those that would have resulted if such Tim Hortons shareholder had received the form of consideration that the shareholder elected.

For illustrative examples of how the proration procedures would work in the event there is an oversubscription of the cash election or shares election in the arrangement, see “The Transactions—Election and Proration Procedures; Procedures for Converting Tim Hortons Common Shares into Arrangement Consideration; Dissenters Rights; Withholding Rights”.

Because the value of each Holdings common share that Holdings will issue to Tim Hortons shareholders in connection with the arrangement could be different from the implied value of Holdings common shares at the time Tim Hortons shareholders vote to approve the arrangement, Tim Hortons shareholders cannot be sure of the market price of the Holdings common shares they will receive.

Upon completion of the transactions, holders of Tim Hortons common shares, other than those who make cash elections or shares elections, will receive 0.8025 Holdings common shares and C$65.50 in cash. Holders of Tim Hortons common shares who make cash elections will receive C$88.50 in cash, and holders of Tim Hortons common shares who make shares elections will receive 3.0879 Holdings common shares, in each case subject to the proration procedure. The number of Holdings common shares that Holdings will issue to Tim Hortons shareholders as a result of the arrangement will not be adjusted in the event of any increase or decrease in the share price of either Burger King Worldwide common stock or Tim Hortons common shares between the time Tim Hortons shareholders vote to approve the arrangement and the completion of the transactions.

The market value of each Holdings common share that Holdings will issue to Tim Hortons shareholders as a result of the arrangement could vary significantly from the implied value of Holdings common shares on the date of this joint information statement/circular or the date of the Tim Hortons special meeting. Because the number

 

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of Holdings common shares that will be issued to Tim Hortons shareholders as a result of the arrangement will not be adjusted to reflect any changes in the market value of Burger King Worldwide common stock or Tim Hortons common shares, such market price fluctuations may affect the value that Tim Hortons shareholders will receive upon completion of the transactions. Share price changes may result from a variety of factors, including changes in the business, operations or prospects of Burger King Worldwide or Tim Hortons, market assessments of the likelihood that the transactions will be completed, the timing of the transactions, regulatory considerations, general market and economic conditions and other factors. Shareholders are urged to obtain current market quotations for Burger King Worldwide common stock and Tim Hortons common shares. See “Financial Information—Comparative Per Share Data” and “Financial Information—Comparative Per Share Market Price Data and Dividend Information” for additional information on the market value of Burger King Worldwide common stock and Tim Hortons common shares.

Burger King Worldwide stockholders may receive a portion of their consideration in a different form from what they elect.

As a result of the merger, stockholders of Burger King Worldwide will receive, for each share of Burger King Worldwide common stock held, 0.99 Holdings common shares and 0.01 Partnership exchangeable units. Alternatively, Burger King Worldwide stockholders will have the right to make an election to receive one Partnership exchangeable unit, but no Holdings common shares, for each share of their Burger King Worldwide common stock.

Although each Burger King Worldwide stockholder may elect to receive only Partnership exchangeable units in the merger, such election is subject to a proration procedure as set forth in the arrangement agreement. The maximum number of Partnership exchangeable units available for all Burger King Worldwide stockholders will be fixed at the number of exchangeable units that would cause the fair market value of Holdings’ interest in Partnership to be less than 50.1% of the fair market value of all equity interests in Partnership as of the date on which the transactions are completed. As a result, if the aggregate number of Partnership exchangeable units that would otherwise have been issued to Burger King Worldwide stockholders who elected to receive only Partnership exchangeable units exceeds this maximum number, each such stockholder will receive fewer exchangeable units, and correspondingly more Holdings common shares, than such stockholder elected. This could result in, among other things, tax consequences that differ from those that would have resulted if such Burger King Worldwide stockholder had received the form of consideration that the shareholder elected.

For illustrative examples of how the proration procedure would work in the event there is an oversubscription of exchangeable units in the merger, see “The Transactions—Election and Proration Procedures; Exchange of Shares of Burger King Worldwide Common Stock”.

Because the value of each Holdings common share that Holdings will issue to Burger King Worldwide stockholders in connection with the merger could be different from the implied value of Holdings common shares at the date of execution of the arrangement agreement, Burger King Worldwide stockholders cannot be sure of the market price of the Holdings common shares they will receive.

The number of Holdings common shares (or Partnership exchangeable units) that Holdings (or Partnership) will issue to Burger King Worldwide stockholders as a result of the merger will not be adjusted in the event of any increase or decrease in the share price of either Burger King Worldwide common stock or Tim Hortons common shares between the date of execution of the arrangement agreement (August 26, 2014) and the completion of the transactions.

The market value of each Holdings common share (or Partnership exchangeable unit) that Holdings (or Partnership) will issue to Burger King Worldwide stockholders as a result of the merger could vary significantly from the implied value of Holdings common shares on the date of execution of the arrangement agreement. Because the number of Holdings common shares (and Partnership exchangeable units) that will be issued to

 

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Burger King Worldwide stockholders as a result of the merger will not be adjusted to reflect any changes in the market value of Burger King Worldwide common stock or Tim Hortons common shares, such market price fluctuations may affect the value that Burger King Worldwide stockholders will receive upon completion of the transactions. Share price changes may result from a variety of factors, including changes in the business, operations or prospects of Burger King Worldwide or Tim Hortons, market assessments of the likelihood that the transactions will be completed, the timing of the transactions, regulatory considerations, general market and economic conditions and other factors. Stockholders are urged to obtain current market quotations for Burger King Worldwide common stock and Tim Hortons common shares. See “Financial Information—Comparative Per Share Data” and “Financial Information—Comparative Per Share Market Price Data and Dividend Information” for additional information on the market value of Burger King Worldwide common stock and Tim Hortons common shares.

Obtaining required approvals necessary to satisfy the conditions to the completion of the transactions may delay or prevent completion of the transactions, result in additional expenditures of money and resources and/or reduce the anticipated benefits of the transactions.

The transactions are subject to customary closing conditions. These closing conditions include, among others, the receipt of required approval of Tim Hortons shareholders, approval of the arrangement by the Ontario court, the effectiveness of the registration statement of which this joint information statement/circular is a part, expiration or termination of the waiting period under the HSR Act in the United States and receipt of Competition Act, Investment Canada Act and Transportation Act approvals in Canada. The governmental agencies from which the parties will seek certain of these approvals have broad discretion in administering the governing regulations. As a condition to their approval, these agencies may impose requirements, limitations or costs, require divestitures, require undertakings or place restrictions on the conduct of the Holdings business after the closing. These requirements, limitations, costs, divestitures or restrictions could jeopardize or delay the consummation of the transactions or may reduce the anticipated benefits of the transactions. Further, no assurance can be given as to the terms, conditions and timing of the required approvals. If Burger King Worldwide and Tim Hortons agree to any material requirements, limitations, costs or restrictions in order to obtain any approvals required to consummate the arrangement and the merger, these requirements, limitations, costs or restrictions could materially and adversely affect the anticipated benefits of the transactions. This could result in a failure to consummate these transactions or have a material adverse effect on Holdings’ and Partnership’s business and results of operations. In addition, failure to obtain approval from any of the governmental agencies may result in the termination of the transactions. If the transactions are terminated because Burger King Worldwide is unable to obtain Investment Canada Act approval, Burger King Worldwide may be required to pay to Tim Hortons a termination fee of C$500 million. See “The Arrangement Agreement—Conditions to the Completion of the Arrangement and the Merger” for a discussion of the conditions to the completion of the transactions and “The Transactions—Regulatory Approvals Required”.

Tim Hortons and Burger King Worldwide’s respective business relationships, including relationships with franchisees and customer relationships, may be subject to disruption due to uncertainty associated with the transactions.

Parties with which Tim Hortons and Burger King Worldwide currently do business or may do business in the future, including franchisees, customers and suppliers, may experience uncertainty associated with the transactions, including with respect to current or future business relationships with Tim Hortons, Burger King Worldwide, Partnership or Holdings. As a result, Tim Hortons and Burger King Worldwide’s business relationships may be subject to disruptions if franchisees, customers, suppliers and others attempt to negotiate changes in existing business relationships or consider entering into business relationships with parties other than Tim Hortons or Burger King Worldwide as a result of the transactions. These disruptions could have a material and adverse effect on the businesses, financial condition, results of operations or prospects of Holdings and Partnership following the closing. The effect of such disruptions could be exacerbated by a delay in the consummation of the transactions or termination of the arrangement agreement.

 

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While the transactions are pending, Tim Hortons and Burger King Worldwide are restricted from taking certain actions. In addition to affecting their respective business operations, this may also affect relationships with their respective employees.

The arrangement agreement restricts Tim Hortons and, to a lesser extent, Burger King Worldwide, from taking specified actions until the transactions occur without the consent of the other party. These restrictions may prevent Tim Hortons or Burger King Worldwide from pursuing attractive business opportunities that may arise prior to the completion of the transactions. In addition, employee retention may be challenging during the pendency of the transactions, as certain employees may experience uncertainty about their future roles. If key employees depart because of issues related to the uncertainty and difficulty of integration or a desire not to remain with the businesses, the business of the combined company following the transactions could be seriously harmed.

Until the completion of the transactions or the termination of the arrangement agreement in accordance with its terms, Tim Hortons and Burger King Worldwide are each prohibited from entering into certain transactions and taking certain actions that might otherwise be beneficial to Tim Hortons or Burger King Worldwide and their respective shareholders and stockholders.

Until the transactions are completed, the arrangement agreement restricts Tim Hortons and, to a lesser extent, Burger King Worldwide, from taking specified actions without the consent of the other party, and requires each of Tim Hortons and Burger King Worldwide to operate in the ordinary course of business consistent with past practices. These restrictions may prevent Tim Hortons and/or Burger King Worldwide from making appropriate changes to their respective businesses or pursuing attractive business opportunities that may arise prior to the completion of the transactions. See “The Arrangement Agreement—Covenants” for a description of the restrictive covenants applicable to Tim Hortons and Burger King Worldwide.

The arrangement agreement contains provisions that restrict Tim Hortons ability to pursue alternatives to the transactions and, in specified circumstances, could require Tim Hortons to pay Burger King Worldwide a termination fee.

Under the arrangement agreement, Tim Hortons is restricted, subject to certain exceptions, from soliciting any offer or proposal for specified alternative transactions involving Tim Hortons, or, subject to certain exceptions relating to the receipt of unsolicited offers that may be deemed to be superior proposals, from participating in discussions or engaging in negotiations regarding such an offer or proposal with, or furnishing any non-public information in connection with such an offer or proposal to, any person that has made such an offer or proposal. If the arrangement agreement is terminated by Tim Hortons to enter into an agreement with respect to a superior proposal, or by Burger King Worldwide after the Tim Hortons board of directors has changed its recommendation regarding the arrangement, then Tim Hortons will be required to pay a termination fee of C$345 million to Burger King Worldwide. Tim Hortons will also be required to pay a termination fee of C$345 million to Burger King Worldwide if either party terminates the arrangement agreement after Tim Hortons shareholders have failed to approve the arrangement, if prior to such termination an acquisition proposal was publicly made for Tim Hortons and not withdrawn, and prior to the 12-month anniversary of the termination Tim Hortons consummates an alternative transaction.

These provisions may have the effect of increasing the cost to Tim Hortons if Tim Hortons enters into an agreement with respect to a superior proposal or if the Tim Hortons board of directors changes its recommendation that Tim Hortons shareholders approve the arrangement. These provisions could also discourage a third party that may have an interest in acquiring all or a significant part of Tim Hortons from considering or proposing that acquisition, even if such third party were willing to pay consideration with a higher value than the consideration to be paid in the arrangement.

 

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Tim Hortons and Burger King Worldwide directors and officers may have interests in the transactions different from the interests of Tim Hortons shareholders and Burger King Worldwide stockholders.

Certain of the directors and executive officers of Tim Hortons and Burger King Worldwide negotiated the terms of the arrangement agreement, the boards of directors of each of Tim Hortons and Burger King Worldwide each unanimously approved the arrangement agreement and the transactions contemplated thereby, and the Tim Hortons board of directors recommended that the shareholders of Tim Hortons vote in favor of the arrangement. These directors and executive officers may have interests in the transactions that are different from, or in addition to, those of Tim Hortons shareholders and Burger King Worldwide stockholders. These interests include, but are not limited to, the continued employment of certain executive officers of Tim Hortons and Burger King Worldwide by Holdings, the continued service of certain directors of Tim Hortons and Burger King Worldwide as directors of Holdings and the treatment in the arrangement of stock options, restricted stock units, performance stock units, deferred stock units, change of control–employment agreements and other rights held by Tim Hortons and Burger King Worldwide directors and executive officers. Tim Hortons shareholders should be aware of these interests when they consider the recommendation of the Tim Hortons board of directors that they vote in favor of the arrangement. The Tim Hortons board of directors was aware of these interests when it determined that the consideration to be received by Tim Hortons shareholders pursuant to the arrangement is fair from a financial point of view, and that the arrangement is in the best interests of Tim Hortons, and recommended that Tim Hortons shareholders vote in favor of the arrangement. The Burger King Worldwide board of directors was also aware of these interests when it determined that the transactions are in the best interests of Burger King Worldwide and approved the arrangement agreement and the transactions contemplated thereby. The interests of Tim Hortons and Burger King Worldwide directors and executive officers are described in more detail in the section of this document entitled “The Transactions—Interests of Certain Persons related to Tim Hortons in the Transactions” and “The Transactions—Interests of Certain Persons related to Burger King Worldwide in the Transactions”.

Tim Hortons shareholders and Burger King Worldwide stockholders will have a reduced ownership and voting interest in the combined company after the transactions and will exercise less influence over management.

Tim Hortons shareholders currently have the right to vote in the election of the board of directors of Tim Hortons and on other matters affecting Tim Hortons. Upon the completion of the transactions, each Tim Hortons shareholder who receives Holdings common shares will become a shareholder of Holdings with a percentage ownership of Holdings that is smaller than the shareholder’s previous percentage ownership of Tim Hortons. It is currently expected that the former shareholders of Tim Hortons as a group will receive shares in the arrangement constituting approximately 21% of the voting power of Holdings immediately after the transactions. Because of this, the former Tim Hortons shareholders as a group will have less influence on the management and policies of Holdings than they now have on the management and policies of Tim Hortons.

Similarly, Burger King Worldwide stockholders currently have the right to vote in the election of the board of directors of Burger King Worldwide and on other matters affecting Burger King Worldwide. Upon the completion of the transactions, each Burger King Worldwide stockholder who receives Holdings common shares (or Partnership exchangeable units) will become a shareholder of Holdings (and/or a unitholder of Partnership) with a percentage ownership of Holdings (including on a fully exchanged basis) that is smaller than the shareholder’s previous percentage ownership of Burger King Worldwide. It is currently expected that the former stockholders of Burger King Worldwide as a group will receive common shares (or Partnership exchangeable units) in the merger constituting approximately 69% of the voting power of Holdings (on a fully exchanged basis) immediately after the transactions. Because of this, Burger King Worldwide stockholders will have less influence on the management and policies of Holdings as a group than they now have on the management and policies of Burger King Worldwide.

 

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3G will own a significant amount of the voting power of Holdings after the transactions, and its interests may conflict with or differ from the interests of the Tim Hortons shareholders and the other Burger King Worldwide stockholders.

3G, which is controlled by 3G Capital Partners Ltd., which we refer to as 3G Capital, a New York private equity firm, currently owns approximately 69.22% of the Burger King Worldwide common stock, and, after the completion of the transactions, will control approximately 48% of the voting power of Holdings. The interests of 3G Capital may not always be aligned with the interests of Tim Hortons shareholders and the other Burger King Worldwide stockholders. Following the transactions, it is expected that 3G Capital will beneficially own 51% of the common equity of the combined company on a fully diluted and fully exchanged basis, representing an aggregate of 48% of the voting power of Holdings. So long as 3G Capital continues to directly or indirectly own a significant amount of the voting power of Holdings, it will continue to be able to strongly influence or effectively control the business decisions of Holdings. 3G Capital may have interests that are different from those of Tim Hortons shareholders and the other Burger King Worldwide stockholders, and it may exercise its voting and other rights in a manner that may be adverse to the interests of such shareholders.

In addition, this concentration of ownership could have the effect of delaying or preventing a change in control or otherwise discouraging a potential acquiror from attempting to obtain control of Holdings, which could cause the market price of Holdings common shares to decline or prevent Holdings shareholders from realizing a premium over the market price for their common shares or exchangeable units.

3G Capital is in the business of making investments in companies and may from time to time in the future acquire or develop controlling interests in businesses engaged in the quick-service restaurant (“QSR”) industry that complement or directly or indirectly compete with certain portions of the Holdings business. In addition, 3G Capital may pursue acquisitions or opportunities that may be complementary to the Holdings business and, as a result, those acquisition opportunities may not be available to Holdings.

Upon completion of the transactions Holdings expects not to be in compliance with certain “best practices” established by Canadian securities regulators in respect of corporate governance.

It is anticipated that neither a majority of the board of directors of Holdings nor the chairman of Holdings will be “independent” for purposes of Canadian securities laws, and Holdings’ nominating and corporate governance and compensation committees may not be composed solely of independent directors. Accordingly, Holdings will not be in compliance with the governance best practices set forth in National Instrument 58-201 – Corporate Governance Guidelines (referred to herein as “NI 58-201”) and National Instrument 58-101 – Disclosure of Corporate Governance Practices (referred to herein as “NI 58-101”) with respect to standards of director independence. Accordingly, you will not have the same protections afforded to shareholders of companies that are in compliance with the corporate governance best practices established by the Canadian Securities Administrators.

The Tim Hortons shareholders are expected to receive dissent rights in connection with the Arrangement, which if exercised in substantial numbers could impact the arrangement consideration mix or the completion of the arrangement.

Registered holders of Tim Hortons common shares are expected to be entitled to dissent from the arrangement resolution in the manner provided in section 190 of the CBCA, as expected to be modified by the interim order and the plan of arrangement. If the statutory procedures governing dissent rights are complied with, this right could lead to judicial determination of the fair value required to be paid to such dissenting shareholders for their Tim Hortons common shares that is different in amount and form from the consideration offered under the arrangement. There is no assurance that the arrangement can be completed without Tim Hortons shareholders exercising dissent rights in respect of a substantial number of Tim Hortons common shares, which would reduce the amount of cash available to the Tim Hortons shareholders as consideration under the arrangement.

 

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In addition, the arrangement agreement is subject to a condition in favor of Burger King Worldwide that the number of Tim Hortons common shares held by Tim Hortons shareholders that have validly exercised dissent rights will not exceed nine percent of the number of Tim Hortons common shares outstanding as of August 26, 2014. If such condition is not satisfied, the transactions may not occur.

Burger King Worldwide and Tim Hortons may be named in legal proceedings in connection with the transactions, the outcomes of which are uncertain, could delay or prevent the completion of the transactions.

Burger King Worldwide, Tim Hortons and their respective directors may be named as defendants in putative shareholder class action challenging the proposed transactions. Among other remedies, the plaintiffs in such actions, if they do arise, may seek to enjoin the transactions. Such legal proceedings could delay or prevent the transactions from becoming effective within the agreed upon timeframe.

Burger King Worldwide’s inability to satisfy and comply with conditions under its existing financing commitments or, if necessary, obtain additional or replacement financing could delay or prevent the completion of the transactions.

The obligations of Burger King Worldwide and Holdings under the arrangement agreement are not subject to any conditions regarding their ability to finance, or obtain financing for, the transactions contemplated by the arrangement agreement.

Holdings must obtain a substantial amount of capital from third-party sources to finance the transactions contemplated by the arrangement agreement. This financing is expected to take several forms, including a senior secured term loan facility in an aggregate principal amount of $6,750 million, a senior secured revolving credit facility in an aggregate principal amount of $500 million, senior secured second lien notes in an aggregate principal amount of up to $2,250 million and the proceeds of the sale of the preferred shares to Berkshire pursuant to the securities purchase agreement. See “The Transactions—Financing for the Transactions” for more information.

The funding of the debt financing commitment obtained by Burger King Worldwide in connection with the arrangement agreement and the sale of the preferred shares are subject to a number of conditions, as described under “The Transactions—Financing for the Transactions”, and there is a risk that one or more of these conditions will not be satisfied. If these conditions are not satisfied, then the funds under these financing arrangements may not be available to Holdings for purposes of consummating the transactions.

Holdings’ substantial leverage and debt service obligations could adversely affect Holdings’ business.

After giving effect to the transactions, Holdings expects to have total external debt of approximately $9.2563 billion. The degree to which Holdings will be leveraged following the transaction could have important consequences to Holdings shareholders, including, but not limited to, potentially:

 

    increasing Holdings’ vulnerability to, and reducing its flexibility to respond to, general adverse economic and industry conditions;

 

    requiring the dedication of a substantial portion of Holdings’ cash flow from operations to the payment of principal of, and interest on, indebtedness, thereby reducing the availability of such cash flow to fund working capital, capital expenditures, acquisitions, joint ventures, product research, dividend share repurchases and development or other corporate purposes;

 

    increasing Holdings’ vulnerability to and limiting its flexibility in planning for, or reacting to, changes in Holdings’ business and the competitive environment and the industry in which it operates;

 

    placing Holdings at a competitive disadvantage as compared to its competitors, to the extent that they are not as highly leveraged;

 

    restricting Holdings from making strategic acquisitions or causing Holdings to make non-strategic divestitures;

 

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    exposing Holdings to the risk of increased interest rates as borrowings under Holdings’ credit facilities are expected to be subject to variable rates of interest;

 

    making it more difficult for Holdings to repay, refinance, or satisfy its obligations with respect to its debt;

 

    causing the long-term and short-term debt ratings of Holdings and its subsidiaries to be lower than the long-term and short-term debt ratings currently applicable to Tim Hortons and Burger King Worldwide; and

 

    limiting Holdings’ ability to borrow additional funds in the future and increasing the cost of any such borrowing.

Holdings expects the terms of its indebtedness to restrict its current and future operations, particularly its ability to incur additional debt that it may need to fund initiatives in response to changes in its business, the industries in which it operates, the economy and government regulations.

The terms of Holdings’ indebtedness are expected to include a number of restrictive covenants that impose significant operating and financial restrictions on Holdings and its subsidiaries and limit the ability to engage in actions that may be in Holdings’ long-term best interests, including but not limited to restrictions on Holdings’ and its subsidiaries’ ability to:

 

    incur additional indebtedness;

 

    pay dividends on, repurchase or make distributions in respect of capital stock;

 

    make investments or acquisitions;

 

    sell, transfer, or otherwise convey certain assets;

 

    create liens;

 

    consolidate, merge, sell or otherwise dispose of substantially all of Holdings’ or its subsidiaries’ assets;

 

    enter into agreements restricting the ability to pay dividends or make other intercompany transactions;

 

    enter into transactions with affiliates; and

 

    prepay certain kinds of indebtedness.

A breach of the covenants under Holdings’ indebtedness could result in an event of default under the applicable agreement. Such a default could allow the holders of such indebtedness to accelerate the repayment of such debt and may result in the acceleration of the repayment of any other debt to which a cross-acceleration or cross-default provision applies. In addition, an event of default under the senior secured credit facilities would also permit the lenders thereunder to terminate all other commitments to extend additional credit under the senior secured credit facilities.

Furthermore, if Holdings were unable to repay the amounts due under its secured indebtedness, the holders of such indebtedness could proceed against the collateral that secures such indebtedness. In the event Holdings’ creditors accelerate the repayment of its indebtedness, Holdings and its subsidiaries may not have sufficient assets to repay that indebtedness.

Despite its expected substantial indebtedness level, Holdings may be able to incur substantially more indebtedness. This could further exacerbate the risks to Holdings’ financial condition described above.

Holdings and its subsidiaries expect to be able to incur substantial additional indebtedness in the future. Although the terms of Holdings’ indebtedness are expected to contain restrictions on the incurrence of additional indebtedness and additional liens, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial.

 

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Servicing debt and funding other obligations requires a significant amount of cash, and Holdings’ and Partnership’s ability to generate sufficient cash depends on many factors, some of which are beyond their control.

Holdings’ and Partnership’s ability to make payments on and refinance their indebtedness and make required payments to holders of preferred shares and Tim Hortons and Burger King Worldwide’s ability to make payments on and refinance the indebtedness of Burger King Worldwide and Tim Hortons and to fund each of their operations and capital expenditures depends upon their ability to generate cash flow and secure financing in the future. Their ability to generate future cash flow depends, among other things, upon:

 

    future operating performance;

 

    general economic conditions;

 

    competition; and

 

    legislative and regulatory factors affecting our operations and business.

Some of these factors are beyond their control. There is no assurance that the businesses of Burger King Worldwide or Tim Hortons will generate cash flow from operations or that future debt or equity financings will be available to them to enable them to pay their indebtedness or to fund other needs. As a result, any of them may need to refinance all or a portion of their indebtedness on or before maturity. There is no assurance that they will be able to refinance any of their indebtedness on favorable terms, or at all. Any inability to generate sufficient cash flow or refinance their indebtedness on favorable terms could have a material adverse effect on the financial condition of Holdings and Partnership.

Holdings expects the terms of its indebtedness and preferred shares to be subject to mandatory redemption or repayment upon a change of control, and such terms could have the effect of delaying or preventing a future change of control.

Holdings intends to obtain capital from third-party sources to finance the transactions contemplated by the arrangement agreement. This financing is expected to take several forms, including a senior secured term loan facility in an aggregate principal amount of $6,750 million, a senior secured revolving credit facility in an aggregate principal amount of $500 million, senior secured second lien notes in an aggregate principal amount of up to $2,250 million and $3 billion in preferred shares issued to Berkshire pursuant to the securities purchase agreement.

In connection with any future change of control of Holdings, subject to important exceptions contained therein, (i) the terms of the credit agreement governing the senior secured term loan facility and the senior secured revolving credit facility will require repayment by Holdings in the event of a change of control; (ii) the indenture governing the senior secured second lien notes will require the issuer thereof to make an offer to repurchase the notes in connection with a change of control; and (iii) the terms of the preferred shares will require, if requested by the holders of not less than a majority of the outstanding preferred shares, the preferred shares to be redeemed in full by Holdings as a result of a change of control. In addition, other existing or future indebtedness of Holdings may also be subject to mandatory repurchase or repayment upon a future change of control. Accordingly, a future change of control of Holdings would require these and possibly other obligations to become subject to repurchase, repayment and/or redemption. In any such event, Holdings may not have sufficient resources to repurchase, repay and redeem these obligations, as applicable. Moreover, if such financing is required to be repurchased, repaid or redeemed, other third-party financing may be required in order to provide the funds necessary for Holdings to satisfy such obligations, and Holdings may not be able to obtain such additional financing on terms favorable to it or at all.

Any of these provisions may also discourage a potential acquirer from proposing or completing a transaction that may otherwise have presented a premium to Holdings shareholders.

 

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The proposed transactions could have an adverse effect on the Tim Hortons and the Burger King Worldwide brands.

The success of Tim Hortons and Burger King Worldwide is largely dependent upon the ability of Tim Hortons and Burger King Worldwide to maintain and enhance the value of their respective brands, their guests’ connection to and perception of the brands, and a positive relationship with restaurant owners. Brand value could be severely damaged if the proposed transactions receive considerable negative publicity or if guests or restaurant owners otherwise come to have a diminished view of the brands as a result of the transactions or the common ownership of the existing businesses.

The common ownership of the businesses currently conducted by Burger King Worldwide and Tim Hortons will create numerous risks and uncertainties, which could adversely affect operating results of Holdings or prevent Holdings from realizing the expected benefits of the merger and the arrangement.

Strategic transactions like the merger and the arrangement create numerous uncertainties and risks and require significant efforts and expenditures. Each of Burger King Worldwide and Tim Hortons will transition from being a standalone public corporation to being part of one holding company incorporated in Canada. The success of the arrangement will depend, in part, on Holdings’ ability to realize the anticipated synergies and cost savings, which is subject to integration challenges and other unforeseen difficulties. The ability of Holdings to realize synergies will be constrained by undertakings which will be required to be given to the Government of Canada in connection with obtaining approval under the Investment Canada Act. The transaction involves the integration of companies that have previously operated independently. The integration process may be complex, costly and time-consuming. The difficulties of integration include, among others:

 

    the diversion of Holdings’ management’s attention to integration of operations and the establishment of corporate and administrative infrastructures;

 

    difficulties in achieving anticipated business opportunities and growth prospects from the respective businesses of Burger King Worldwide and Tim Hortons;

 

    unanticipated issues in integrating logistics, information, communications and other systems;

 

    difficulties in the assimilation of employees and corporate cultures, to the extent necessary;

 

    challenges in keeping existing customers and obtaining new customers;

 

    unanticipated changes in applicable laws and regulations;

 

    unanticipated issues, expenses and liabilities; and

 

    challenges in attracting and retaining key personnel.

If any of these factors impairs Holdings’ ability to integrate the operations of Tim Hortons with those of Burger King Worldwide successfully or on a timely basis, Holdings may not be able to realize the anticipated synergies, business opportunities and growth prospects from ownership of businesses. Holdings may not be able to accomplish any or all of these integrations smoothly, successfully or within the anticipated costs or time frame. In addition, Holdings may be required to spend additional time or money on integration that otherwise would be spent on the development and expansion of its business.

In addition, the market price of Holdings common shares and/or Partnership exchangeable units may decline following the transaction if, among other things, the integration of Burger King Worldwide and Tim Hortons is unsuccessful, takes longer than expected or fails to achieve financial benefits to the extent anticipated by financial analysts or investors, or the effect of the transaction on the financial results of the combined company is otherwise not consistent with the expectations of financial analysts or investors. These integration matters and our significant amount of indebtedness may hinder our ability to make further acquisitions and could have an adverse effect on us for an undetermined period after consummation of the arrangement.

 

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Common ownership of Burger King Worldwide and Tim Hortons may be more difficult, costly or time-consuming than expected, which may adversely affect Holdings’ results and negatively affect the value of Holdings common shares following the transactions.

Burger King Worldwide and Tim Hortons have entered into the arrangement agreement because each believes that the transactions will be beneficial to it and its respective stockholders and shareholders and that common ownership of the businesses of Burger King Worldwide and Tim Hortons will produce benefits and cost savings. If Holdings is not able to successfully manage the businesses of Burger King Worldwide and Tim Hortons in an efficient and effective manner, the anticipated benefits and cost savings of the transactions may not be realized fully, or at all, or may take longer to realize than expected, and the value of Holdings common shares may be affected adversely. The ability of Holdings to realize cost savings will also be constrained by undertakings which will be required to be given to the Government of Canada in connection with obtaining approval under the Investment Canada Act.

In addition, the actual integration may result in additional and unforeseen expenses, and the anticipated benefits of the integration plan may not be realized. Actual synergies, if achieved, may be lower than and may take longer to achieve than anticipated. If Holdings is not able to adequately address integration challenges, Holdings may be unable to successfully integrate Burger King Worldwide’s and Tim Hortons operations or to realize the anticipated benefits of the integration of the two companies.

Holdings’ actual financial positions and results of operations may differ materially from the unaudited pro forma financial data included in this joint information statement/circular.

The pro forma financial information contained in this joint information statement/circular is presented for illustrative purposes only and may not necessarily be an indication of what Holdings’ financial position or results of operations would have been had the transactions been completed on the dates indicated. The pro forma financial information has been derived from (i) the audited consolidated financial statements of Burger King Worldwide as of and for the fiscal year ended December 31, 2013, which have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and incorporated by reference in this joint information statement/circular, (ii) the audited consolidated financial statements of Tim Hortons as of and for the fiscal year ended December 29, 2013, which have been prepared in accordance with GAAP and are incorporated by reference in this joint information statement/circular and (iii) the unaudited consolidated financial statements of Burger King Worldwide and Tim Hortons for the six month periods ended June 30, 2014 and June 29, 2014, respectively, which have been prepared in accordance with GAAP and are incorporated by reference in this joint information statement/circular. Differences between assumptions in the pro forma financial information and the final acquisition accounting will occur and could have a material impact on the pro forma financial information and the combined company’s financial position and future results of operations.

Moreover, the pro forma financial information does not reflect all costs that are expected to be incurred by Holdings in connection with the transactions. As a result, the actual financial condition and results of operations of Holdings following the transactions may not be consistent with, or evident from, the pro forma financial information.

In addition, the assumptions used in preparing the pro forma financial information may not necessarily prove to be accurate, and other factors may affect Holdings’ financial condition or results of operations following the closing. Any potential decline in Holdings’ financial condition or results of operations may cause significant variations in the share price of Holdings and/or the market price of Partnership exchangeable units. See “Financial Information—Unaudited Pro Forma Condensed Consolidated Financial Information”.

 

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Burger King Worldwide and Tim Hortons will incur substantial, direct and indirect transaction-related costs in connection with the arrangement and the merger and other transactions contemplated by the arrangement agreement.

Burger King Worldwide and Tim Hortons expect to incur a number of non-recurring transaction-related costs associated with completing the transactions. These fees and costs will be substantial. Non-recurring transaction costs include, but are not limited to, fees paid to legal, financial and accounting advisors, filings fees and printing costs.

Holdings expects to incur substantial expenses in connection with coordinating the businesses, operations, policies and procedures of Burger King Worldwide and Tim Hortons. While Holdings has assumed that a certain level of transaction and coordination expenses will be incurred, there are a number of factors beyond Holdings’ control that could affect the total amount or the timing of these transaction and coordination expenses. Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately. These expenses may exceed the costs historically borne by Burger King Worldwide and Tim Hortons.

Additional Factors Relating to Holdings Common Shares

An active trading market for Holdings common shares may not develop.

Prior to the completion of the transactions, there will have been no public market for Holdings common shares. We cannot predict the extent to which investor interest in Holdings will lead to the development of an active trading market on the NYSE or the TSX or how liquid that market might become. An active public market for Holdings common shares may not develop or be sustained after the completion of the transactions. If an active public market does not develop or is not sustained, it may be difficult for you to sell your Holdings common shares at a price that is attractive to you, or at all.

The market price of Holdings common shares may be volatile, and the value of your investment could materially decline.

Investors who hold Holdings common shares may not be able to sell their shares at or above the price at which they purchased the Burger King Worldwide common stock or Tim Hortons common shares. The prices of Burger King Worldwide common stock and Tim Hortons common shares have fluctuated materially from time to time, and Holdings cannot predict the price of its common shares. In addition, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. These broad market and industry factors may materially harm the market price of Holdings common shares, regardless of Holdings’ operating performance. In addition, the Holdings share price may be dependent upon the valuations and recommendations of the analysts who cover the Holdings business, and if its results do not meet the analysts’ forecasts and expectations, Holdings’ share price could decline as a result of analysts lowering their valuations and recommendations or otherwise. In the past, following periods of volatility in the market, securities class-action litigation has often been instituted against companies. Such litigation, if instituted against Holdings, could result in substantial costs and diversion of management’s attention and resources, which could materially and adversely affect Holdings’ business, financial condition, results of operations and growth prospects.

Future sales of Holdings common shares in the public market could cause volatility in the price of Holdings common shares or cause the share price to fall.

Sales of a substantial number of Holdings common shares in the public market, or the perception that these sales might occur, could depress the market price of Holdings common shares, and could impair Holdings’ ability to raise capital through the sale of additional equity securities.

 

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The Holdings common shares to be received by Burger King Worldwide stockholders and Tim Hortons shareholders in connection with the transactions will have different rights from the Burger King Worldwide common stock and Tim Hortons common shares, respectively.

Upon consummation of the transactions, Burger King Worldwide stockholders and Tim Hortons shareholders may become Holdings shareholders and their rights as shareholders will be governed by Holdings’ articles of amendment and by-laws and Canadian law. The existing rights associated with Burger King Worldwide common stock and Tim Hortons common shares are different from the rights associated with Holdings common shares. See “Comparison of Rights of Holders of Burger King Worldwide Common Stock, Holdings Common Shares and Partnership Exchangeable Units” and see “Comparison of the Rights of Tim Hortons Shareholders and Holdings Shareholders”.

Holdings cannot assure you that it will pay any cash dividends for the foreseeable future or that you will realize gains on Holdings common shares.

Any determination to pay dividends in the future will be at the discretion of the Holdings board of directors and will depend upon results of operations, financial condition, contractual restrictions, including agreements governing its debt and equity financing and any future indebtedness it may incur, restrictions imposed by applicable law and other factors the Holdings board of directors deems relevant. Realization of a gain on your Holdings common shares will depend on the appreciation of the price of your Holdings common shares, which may never occur.

Additional Factors Relating to Partnership Exchangeable Units

An active trading market for Partnership exchangeable units may not develop.

Prior to the completion of the transactions, there will have been no public market for Partnership exchangeable units. We cannot predict the extent to which investor interest in Partnership will lead to the development of an active trading market on the TSX or how liquid that market might become. An active public market for Partnership exchangeable units may not develop or be sustained after the completion of the transactions, and such market is not expected to be as liquid as for the Holdings common shares. If an active public market does not develop or is not sustained, it may be difficult for you to sell your Partnership exchangeable units at a price that is attractive to you, or at all.

The market price of Partnership exchangeable units may be volatile, and the value of your investment could materially decline.

Investors who hold Partnership exchangeable units may not be able to sell their exchangeable units at or above the price at which they purchased the Burger King Worldwide common stock. It is also expected that the market for exchangeable units will be less liquid than for the Holdings common shares. The prices of Burger King Worldwide common stock and Tim Hortons common shares have fluctuated materially from time to time, and Partnership cannot predict the price of its exchangeable units. In addition, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. These broad market and industry factors may materially harm the market price of Partnership exchangeable units, regardless of Partnership’s operating performance. In addition, the price of Partnership exchangeable units may be dependent upon the valuations and recommendations of the analysts who cover the business of Holdings and Partnership, and if its results do not meet the analysts’ forecasts and expectations, the price of Partnership exchangeable units could decline as a result of analysts lowering their valuations and recommendations or otherwise. In the past, following periods of volatility in the market, securities class-action litigation has often been instituted against companies. Such litigation, if instituted against Partnership, could result in substantial costs and diversion of management’s attention and resources, which could materially and adversely affect Partnership’s business, financial condition, results of operations and growth prospects.

 

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Future sales of Partnership exchangeable units or Holdings common shares in the public market could cause volatility in the price of Partnership exchangeable units or cause the unit price to fall.

Sales of a substantial number of Partnership exchangeable units or Holdings common shares in the public market, or the perception that these sales might occur, could depress the market price of Partnership exchangeable units, and could impair Partnership’s ability to raise capital through the sale of additional exchangeable units.

Exchangeable units may not trade equally with the Holdings common shares.

The exchangeable units of Partnership and the common shares of Holdings are distinct securities, and the exchangeable units will not be exchangeable for Holdings common shares for a period of one year following the closing of the transactions. The Partnership exchangeable units and Holdings common shares will at all times trade separately, and the public market for exchangeable units is not expected to be as liquid as for the Holdings common shares. In addition, if a holder of exchangeable units exercises its exchange right, Partnership has the right to repurchase each exchangeable unit submitted for exchange in consideration for a cash amount equal to the exchangeable units cash amount (as defined on page [] of this joint information statement/circular) (rather than one Holdings common share), at the sole discretion of the General Partner. As such, the exchangeable units may not trade equally with the Holdings common shares, and could trade at a discount to the market price of the Holdings common shares, which discount could possibly be material.

Burger King Worldwide stockholders may not receive Partnership exchangeable units in accordance with their elections.

If you make an election to receive Partnership exchangeable units in connection with the merger, the actual mix of consideration you will receive will not be known until after all elections have been made. An election to receive the exchangeable unit consideration will be subject to allocation procedures designed to ensure that the fair market value of Holdings’ interest in Partnership is no less than 50.1% of the fair market value of all equity interests in Partnership as of the date on which the transactions are completed. If exchangeable elections are made by a number of Burger King Worldwide stockholders that would result in such former Burger King Worldwide stockholders owning Partnership exchangeable units that represent more than 49.9% of the fair market value of Partnership, then each Burger King Worldwide stockholder will be entitled to receive exchangeable units subject to the proration procedures described below. At this time there is not a way to calculate the potential outcomes of the proration as it is unknown how many Burger King Worldwide stockholders will elect to receive solely Partnership exchangeable units.

As a result of the allocation and proration procedures outlined in the preceding paragraph, holders of Burger King Worldwide common stock may receive the Holdings consideration for some or all of their shares despite the holders’ exchangeable election. Any consideration in the form of Holdings common shares received by these holders in the merger, unlike the exchangeable unit consideration, generally will be immediately taxable to those holders for U.S. federal income tax purposes.

After submitting an election form to receive Partnership exchangeable units, a Burger King Worldwide stockholder will not, subsequent to delivery of stock certificates to the merger exchange agent in connection with a unit election, be able to sell or otherwise transfer his or her shares of Burger King Worldwide for which an exchangeable election has been made, unless and until the Burger King Worldwide stockholder properly revokes his or her unit election by the election deadline.

Under the terms of the arrangement agreement, in the event that a Burger King Worldwide stockholder makes a valid election to receive Partnership exchangeable units, he or she will be required to deliver his or her stock certificates (or an agent’s message or other evidence of transfer with respect to Burger King Worldwide stock held in book-entry form satisfactory to the merger exchange agent) evidencing his or her shares to be

 

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converted into Partnership exchangeable units, in each case together with a properly completed and executed election form, to the merger exchange agent. In order to make a valid exchangeable election, a Burger King Worldwide stockholder must deliver the stock certificates (or an agent’s message or other evidence of transfer with respect to Burger King Worldwide stock held in book-entry form satisfactory to the merger exchange agent) and duly completed and executed election form on or before the election deadline, and there may be a period of up to three business days between that date and the date the merger is completed.

During the period from the date upon which a Burger King Worldwide stockholder submits an election form until the closing of the merger, he or she will not be able to sell or otherwise transfer any shares of Burger King Worldwide common stock subject to the unit election. However, if a Burger King Worldwide stockholder revokes his or her unit election with respect to any of his or her shares of Burger King Worldwide common stock prior to the election deadline, he or she will be able to sell those shares following the return to him or her of the stock certificates evidencing those shares as long as there is sufficient time for such a sale to be completed prior to the closing of the merger.

If the arrangement agreement is terminated, any stock certificates evidencing shares of Burger King Worldwide common stock delivered to the merger exchange agent will be promptly returned and Burger King Worldwide stockholders will again be able to sell or otherwise transfer their shares, although the market price for shares of Burger King Worldwide common stock could be significantly lower at the time the shares are returned than was the case when initial delivery was made.

The Burger King Worldwide board of directors has not made any recommendation with respect to whether a Burger King Worldwide stockholder should make a unit election.

The Burger King Worldwide board of directors makes no recommendation as to whether any Burger King Worldwide stockholder should make an exchangeable election. A stockholder’s determination to make a unit election is a purely voluntary decision. In making this decision, Burger King Worldwide stockholders will not have the benefit of any recommendation of Burger King Worldwide’s board of directors.

The exchange of Partnership exchangeable units into Holdings common shares is subject to certain restrictions and the value of the Holdings common shares received in any exchange may fluctuate.

Under the terms of the partnership agreement, Partnership exchangeable units will not be exchangeable for Holdings common shares for a period of one year following the closing of the transactions.

Beginning one year following the closing of the transactions, holders of Partnership exchangeable units will be entitled to require Partnership to exchange all or any portion of such holder’s Partnership exchangeable units for, at the election of Holdings, in its capacity as the general partner of Partnership, cash (in an amount determined in accordance with the terms of the partnership agreement of Partnership) or Holdings common shares, at a ratio of one Holdings common share for each Partnership exchangeable unit.

The Holdings common shares into which Partnership exchangeable units may be exchanged may be subject to significant fluctuations in value for many reasons, including:

 

    Holdings’ operating and financial performance and prospects;

 

    general market conditions;

 

    the risks described in this joint information statement/circular;

 

    changes to the competitive landscape in the industries or markets in which Holdings and its subsidiaries operate;

 

    the arrival or departure of key personnel; and

 

    speculation in the press or the investment community.

 

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Consequently, due to the potential fluctuations in value, at the time that the exchange right of holders of Partnership exchangeable units becomes exercisable, the Holdings common shares into which Partnership exchangeable units may be exchanged may have a value that differs from the value of Holdings common shares as of the merger effective time. If a holder of Partnership exchangeable units elects to exchange his or her Partnership exchangeable units for Holdings common shares, the exchange generally will be taxable for U.S. and Canadian federal income tax purposes.

In certain circumstances, a Limited Partner may lose its limited liability status.

The Limited Partnerships Act (Ontario) (the “Ontario Limited Partnerships Act”) provides that a limited partner benefits from limited liability unless, in addition to exercising rights and powers as a limited partner, such limited partner takes part in the control of the business of a limited partnership of which such limited partner is a partner. Subject to the provisions of the Ontario Limited Partnerships Act and of similar legislation in other jurisdictions of Canada, the liability of each Limited Partner for the debts, liabilities and obligations of Partnership will be limited to the Limited Partner’s capital contribution, plus the Limited Partner’s share of any undistributed income of Partnership. However, pursuant to the Ontario Limited Partnerships Act, where a Limited Partner has received the return of all or part of that Limited Partner’s capital contribution, the Limited Partner would be liable to Partnership or, where Partnership is dissolved, to its creditors, for any amount, not in excess of the amount of capital contribution returned with interest, necessary to discharge the liabilities of Partnership to all creditors who extended credit or whose claims otherwise arose before the return of the capital contribution. A Limited Partner holds as trustee for the limited partnership any money or other property that is paid or conveyed to the Limited Partner as a return of the Limited Partner’s contribution that is made contrary to the Ontario Limited Partnerships Act.

The limitation of liability conferred under the Ontario Limited Partnerships Act may be ineffective outside Ontario except to the extent it is given extra-territorial recognition or effect by the laws of other jurisdictions. There may also be requirements to be satisfied in each jurisdiction to maintain limited liability. If limited liability is lost, Limited Partners may be considered to be general partners (and therefore be subject to unlimited liability) in such jurisdiction by creditors and others having claims against the Partnership.

U.S. Federal Income Tax Risks Related to the Holdings Common Shares and Partnership Exchangeable Units

You should read the discussion under the caption “The Transaction—Material U.S. Federal Income Tax Considerations of the Arrangement to U.S. Holders” and “The Transactions—Material U.S. Federal Income Tax Considerations of the Merger to U.S. Holders” below for a more complete discussion of the material U.S. federal income tax considerations relating to the transactions and the acquisition, ownership and disposition of Holdings common shares and Partnership exchangeable units.

Holdings and/or Partnership may be treated as a U.S. corporation for U.S. federal income tax purposes.

Holdings, which will be a corporation continued under the laws of Canada at the time of the closing of the transactions, and Partnership, which will be an Ontario limited partnership at the time of the closing of the transactions, generally would be classified as non-U.S. entities (and, therefore, non-U.S. tax residents) under general rules of U.S. federal income taxation. Section 7874 of the Code, however, contains rules that result in a non-U.S. corporation being taxed as a U.S. corporation for U.S. federal income tax purposes, unless certain tests regarding ownership of such entities (as relevant here, ownership by former Burger King Worldwide stockholders) or level of business activities (as relevant here, business activities in Canada by Holdings and its affiliates, including Partnership), are satisfied. The Treasury Regulations promulgated under the Code apply these same rules to non-U.S. publicly traded partnerships, such as Partnership. These statutory and regulatory rules are relatively new, their application is complex and there is little guidance regarding their application.

 

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Based on the terms of the transactions and the anticipated level of business activities of Holdings and its affiliates, including Partnership, it is expected that one or both such tests will be satisfied. Satisfaction of these tests, however, will not be finally determined until after the time of the closing. If it were determined that Holdings and/or Partnership should be taxed as U.S. corporations for U.S. federal income tax purposes, Holdings and/or Partnership could be liable for substantial additional U.S. federal income tax. For Canadian tax purposes, Holdings and Partnership are expected, regardless of any application of section 7874 of the Code, to be treated as a Canadian resident company and a SIFT partnership (as defined in the Tax Act, respectively. Consequently, if Holdings and/or Partnership did not satisfy either of the applicable tests, one or both might be liable for both Canadian and U.S. taxes, which could have a material adverse effect on its financial condition and results of operations.

Future changes to U.S. and non-U.S. tax laws could materially affect Holdings and/or Partnership, including their status as foreign entities for U.S. federal income tax purposes, and adversely affect their anticipated financial positions and results:

Although Holdings and Partnership are expected to satisfy the tests described above and therefore not to be treated as U.S. corporations for U.S. federal tax purposes, changes to the rules in section 7874 of the Code or the Treasury Regulations promulgated thereunder, or other changes in law, could adversely affect Holdings’ and/or Partnership’s status as a non-U.S. entity for U.S. federal income tax purposes, their effective tax rate or future planning for the combined company that is based on current law, and any such changes could have prospective or retroactive application to Holdings and/or Partnership, Burger King Worldwide, their respective stockholders, shareholders and affiliates, and/or the transactions. For example, recent legislative proposals have aimed to expand the scope of section 7874 of the Code, or otherwise address certain perceived issues arising in connection with so-called inversion transactions. It is presently uncertain whether any of such legislative proposals will be enacted into law and, if so, what impact such legislation would have on Holdings. In addition, the U.S. Treasury has indicated that it is considering possible regulatory action in connection with so-called inversion transactions. The timing and substance of any such action is presently uncertain. Any such change of law or regulatory action could adversely impact Holdings’ tax position as well as its financial position and results in a material manner. No such change of law or regulatory action would be grounds for terminating the transactions contemplated by the arrangement agreement.

Moreover, the U.S. Congress, the Organization for Economic Co-operation and Development and other government agencies in jurisdictions where Holdings and its affiliates do business have had an extended focus on issues related to the taxation of multinational corporations. In particular, specific attention has been paid to “base erosion and profit shifting”, where payments are made between affiliates from a jurisdiction with high tax rates to a jurisdiction with lower tax rates. As a result, the tax laws in the U.S. and other countries in which Holdings and its affiliates do business could change on a prospective or retroactive basis, and any such change could adversely affect Holdings, including by reducing the economic benefits expected to be generated by common ownership of Burger King Worldwide and Tim Hortons.

If the arrangement, taken together with the merger, does not qualify as a transaction described in section 351 of the Code, certain U.S. holders of Tim Hortons common shares may be required to pay additional U.S. federal income taxes.

It is intended that, for U.S. federal income tax purposes, the arrangement, taken together with the merger, qualify as a transaction described in section 351 of the Code. However, there is some uncertainty regarding whether the arrangement, taken together with the merger, will qualify for such treatment because there is no authority directly on point with respect to a transaction involving the same facts as the arrangement and the merger. In addition, the closing of the transactions is not conditioned upon the receipt of an opinion of counsel that the arrangement, taken together with the merger, will qualify as a transaction described in section 351 of the Code, and no assurance can be given that the IRS will not challenge such treatment or that a court would not sustain such challenge. Moreover, none of Holdings, Partnership, Burger King Worldwide or Tim Hortons intends to request a ruling from the Internal Revenue Service (“IRS”) regarding the U.S. federal income tax treatment of the arrangement, taken together with the merger. If the arrangement, taken together with the merger,

 

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does not qualify as a transaction described in section 351 of the Code, certain U.S. holders of Tim Hortons common shares receiving Holdings common shares in the arrangement (in particular, such U.S. holders who elect to receive and receive solely Holdings common shares in the arrangement) will be required to pay additional U.S. federal income taxes.

Partnership may be treated as a publicly traded partnership taxed as a non-U.S. corporation for U.S. federal income tax purposes.

While Partnership is organized as an Ontario limited partnership and intends to operate so that it will qualify to be treated for U.S. federal income tax purposes as a partnership, and not as an association or a publicly traded partnership taxable as a corporation, given the highly complex nature of the rules governing partnerships, the ongoing importance of factual determinations, and the possibility of future changes in circumstances, no assurance can be given that Partnership will so qualify for any particular year. Partnership’s taxation as a partnership that is not a publicly traded partnership taxable as a corporation will depend on its ability to meet, on a continuing basis, through actual operating results, the qualifying income exception (as described in “The Transactions—Material U.S. Federal Income Tax Considerations for U.S. Holders of Holdings Common Shares or Partnership Units—Taxation of Holders of Partnership Units”). Accordingly, no assurance can be given that the actual results of Partnership’s operations for any taxable year will satisfy the qualifying income exception.

If Partnership fails to satisfy the qualifying income exception (other than a failure which is determined by the IRS to be inadvertent and which is cured within a reasonable period of time after the discovery of such failure as described below), it will be treated as if it had transferred all of its assets, subject to its liabilities, to a newly formed foreign corporation, on the first day of the year in which it failed to satisfy the qualifying income exception, in return for stock of the corporation, and then distributed such stock to the holders of Partnership units in liquidation of their interests in Partnership. This contribution and liquidation would be taxable to U.S. holders of Partnership units, in whole or in part, in an amount not to exceed the excess of the fair market value of Partnership units over their adjusted basis in the hands of the U.S. holder. If Partnership is not treated as a Partnership for U.S. federal income tax purposes, the consequences of the exchange of Burger King Worldwide stock for Partnership exchangeable units would generally be the same as described below under “The Transactions—Material U.S. Federal Income Tax Considerations for the Merger—Burger King Worldwide Stockholders Receiving Holdings Common Shares”.

You may be subject to U.S. federal income tax on your share of Partnership’s taxable income, regardless of whether you receive any cash distributions from Partnership.

As long as Partnership meets the qualifying income exception for each year (as described in “The Transactions—Material U.S. Federal Income Tax Considerations for U.S. Holders of Holdings Common Shares or Partnership Units—Taxation of Holders of Partnership Units”), Partnership generally should be treated, for U.S. federal income tax purposes, as a partnership. As a partnership for U.S. federal income tax purposes, Partnership is not a taxable entity. Instead, each U.S. holder in computing such holder’s U.S. federal income tax liability for a taxable year will be required to take into account its allocable share of items of Partnership’s income, gain, loss, deduction and credit for each of Partnership’s taxable years ending with or within the taxable year of such U.S. holder, regardless whether the holder has received any distributions. The characterization of an item of Partnership’s income, gain, loss, deduction or credit generally will be determined at Partnership’s (rather than at the holder’s) level. In addition, as a result of such allocation method, a holder may be allocated taxable income even if such holder does not receive any cash distributions.

Tax gain or loss on disposition of Partnership units could be more or less than expected.

A sale or other taxable disposition of all or a portion of a U.S. holder’s interest in its Partnership units will result in the recognition of gain or loss in an amount equal to the difference, if any, between the amount realized on the disposition (including any amount realized in connection with the deemed assumption of partnership liabilities allocated to such U.S. holder) and the U.S. holder’s adjusted tax basis in its Partnership units sold.

 

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Prior distributions to you in excess of the total net taxable income allocated to you, which decrease the tax basis in your Partnership units, will in effect become taxable income to you if the Partnership units are sold at a price greater than your tax basis in those Partnership units, even if the price is less than the original cost.

Tax-exempt entities face unique tax issues from owning Partnership units that may result in adverse tax consequences to them.

In light of the intended financing structure, Partnership may derive income that constitutes “unrelated business taxable income,” or “UBTI.” Consequently, a holder of Partnership units that is a tax-exempt organization may be subject to “unrelated business income tax” to the extent that its allocable share of income consists of UBTI. A tax-exempt partner of a partnership could be treated as earning UBTI if the partnership regularly engages in a trade or business that is unrelated to the exempt function of the tax-exempt partner, if the partnership derives income from debt-financed property or if the partnership interest itself is debt-financed. Tax-exempt entities face unique tax issues from owning Partnership units that may result in adverse tax consequences to them.

Partnership cannot match transferors and transferees of Partnership units, and Partnership will therefore adopt certain income tax accounting positions that may not conform with all aspects of applicable tax requirements. The IRS may challenge this treatment, which could adversely affect the value of Partnership units.

Because Partnership cannot match transferors and transferees of Partnership units, Partnership must maintain uniformity of the economic and tax characteristics of Partnership units to a purchaser of Partnership units. In the absence of uniformity, Partnership may be unable to comply fully with a number of U.S. federal income tax requirements. In order to maintain the fungibility of all Partnership units at all times, Partnership will seek to achieve the uniformity of U.S. tax treatment for all purchasers of Partnership units which are acquired at the same time and price (irrespective of the identity of the particular seller of Partnership units or the time when Partnership units are issued by Partnership), through the application of certain tax accounting principles that the general partner (i.e., Holdings) believes are reasonable for Partnership. However, the IRS may disagree with Partnership and may successfully challenge its application of such tax accounting principles. Any non-uniformity could have a negative impact on the value of Partnership units.

Partnership does not expect to be able to furnish to each holder of Partnership units specific tax information within 90 days after the close of each calendar year, which means that holders of Partnership units who are U.S. taxpayers should anticipate the need to file annually a request for an extension of the due date of their income tax return.

Partnership has agreed to use reasonable efforts to furnish Partnership unit holders tax information (including Schedule K-1) as promptly as possible, which describes a Partnership unit holder’s allocable share of Partnership’s income, gain, loss and deduction for Partnership’s preceding taxable year. Delivery of this information by Partnership will be subject to delay in the event of, among other reasons, the late receipt of any necessary tax information from a subsidiary in which Partnership holds an interest. It is therefore possible that, in any taxable year, Partnership unit holders will need to apply for extensions of time to file their tax returns.

The tax treatment of publicly traded partnerships or an investment in Partnership units could be subject to potential legislative, judicial or administrative changes and differing interpretations, possibly on a retroactive basis.

The present U.S. federal income tax treatment of publicly traded partnerships, including the Partnership, or an investment in Partnership units, may be modified by administrative, legislative or judicial interpretation at any time. Any modification to the U.S. federal income tax laws and interpretations thereof may or may not be applied retroactively. Moreover, any such modification could make it more difficult or impossible for Partnership to meet

 

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the qualifying income exception (as described in “The Transactions—Material U.S. Federal Income Tax Considerations for U.S. Holders of Common Shares or Partnership Units—Taxation of Holders of Partnership Units”) which allows publicly traded partnerships that generate qualifying income to be treated as partnerships (rather than corporations), affect or cause Partnership to change its business activities, or affect the tax consequences of an investment in Partnership units. For example, members of Congress have considered substantive changes to the definition of qualifying income and the treatment of certain types of income earned from partnerships. While these specific proposals would not appear to affect Partnership’s treatment as a partnership, we are unable to predict whether any of these changes, or other proposals, will ultimately be enacted. Any such changes could negatively impact the value of an investment in Partnership units.

The IRS may view the receipt of Partnership exchangeable units as a taxable event for U.S. Holders.

It is possible that the IRS may not accept our view that Partnership will generally be treated as a partnership, and not as a corporation, for U.S. federal income tax purposes and that the receipt of Partnership units (except with respect to the interest in the Holdings Voting Trust as described in more detail under “The Transactions— —Material U.S. Federal Income Tax Considerations for U.S. Holders of Holdings Common Shares or Partnership Units” and “The Transactions—Material U.S. Federal Income Tax Considerations for the Merger – Burger King Worldwide Stockholders Receiving Partnership Units”) pursuant to the merger should qualify as a tax-free exchange within the meaning of section 721 of the Code. It is also possible that the IRS may not accept our view that Partnership units represent interests in Partnership and may attempt to recharacterize Partnership units as shares in Holdings. If Partnership or Partnership units were not so treated, the consequences of the exchange of Burger King Worldwide stock for Partnership units would generally be the same as described below under The Transactions—Material U.S. Federal Income Tax Considerations for the Merger—Burger King Worldwide Stockholders Receiving Holdings Common Shares”.

Additional Factors Relating to Burger King Worldwide and Tim Hortons

Burger King Worldwide and Tim Hortons are subject to the risks described in (i) Item 1A – Risk Factors, in Burger King Worldwide’s Annual Report on Form 10-K for the year ended December 31, 2013 as filed with the SEC on February 21, 2014 and is incorporated by reference in this joint information statement/circular and all Quarterly Reports on Form 10-Q filed thereafter, all of which are filed with the SEC and incorporated by reference into this joint information statement/circular, and (ii) Item 1A—Risk Factors, in Tim Hortons Annual Report on Form 10-K for the year ended December 29, 2013 as filed with the SEC on February 25, 2014 and is incorporated by reference in this joint information statement/circular and all Quarterly Reports on Form 10-Q filed thereafter, all of which are filed with the SEC and incorporated by reference into this joint information statement/circular. See “Where You Can Find More Information” beginning on page [] for the location of information incorporated by reference into this joint information statement/circular.

Additional Factors Relating to the Businesses of Tim Hortons and Burger King Worldwide

Whether or not the transactions are completed, Tim Hortons and Burger King Worldwide will continue to face many of the risks that they currently face with respect to their businesses and affairs. A description of the risk factors applicable to Tim Hortons is found under Item 1A in Tim Hortons Annual Report on Form 10-K for the fiscal year ended December 29, 2013 and in Tim Hortons Quarterly Report on Form 10-Q for the quarter ended June 29, 2014, and a description of the risk factors applicable to Burger King Worldwide is found under Item 1A in Burger King Worldwide’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, each of which is incorporated by reference into this joint information statement/circular.

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This joint information statement/circular and the documents incorporated by reference herein include forward-looking statements which constitute forward-looking information within the meaning of Canadian securities laws and forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are often identified by the words “may,” “might,” “could,” “would,” “will,” “can,” “should” “believes,” “anticipates,” “plans,” “expects,” “intends” “continue,” “potential,” “guidance,” “foresee,” “goal,” “pro forma,” “target,” “appear,” and the negative of these terms or other comparable or similar terminology or expressions and include statements regarding (i) expectations regarding whether the transactions will be consummated, including whether conditions to the consummation of the transactions will be satisfied, or the timing for completing the transactions, (ii) expectations for the effects of the transactions or the ability of the combined company to successfully achieve its business objectives, including common ownership of the companies or the effects of unexpected costs, liabilities or delays, and (iii) expectations for other economic, business, and/or competitive factors. Such forward-looking information reflects current beliefs of management and the boards of directors of Tim Hortons and Burger King Worldwide and is based on information currently available to management and the boards of directors of Tim Hortons and Burger King Worldwide. Other unknown or unpredictable factors could also have material adverse effects on future results, performance or achievements of the combined company. Forward-looking information involves significant risks and uncertainties, should not be read as a guarantee of future performance or results, and will not necessarily be an accurate indication of whether or not or the times at which, or by which, such performance or results will be achieved, and readers are cautioned not to place undue reliance on such forward-looking statements.

The forward-looking statements contained in this joint information statement/circular are subject to inherent risks and uncertainties and are based on numerous assumptions which may prove incorrect and which could cause actual results or events to differ materially from the forward-looking statements. Although these forward-looking statements are based upon what management and the boards of directors of each of Burger King Worldwide and Tim Hortons believe are reasonable assumptions, neither Burger King Worldwide nor Tim Hortons can assure investors that actual results will be consistent with this forward-looking information. Such assumptions include, but are not limited to, the assumptions set forth in this joint information statement/circular, as well as (a) that the transactions will be completed in accordance with the terms and conditions of the arrangement agreement and other transaction documents and on the timelines contemplated by the parties thereto, (b) that court, shareholder, stock exchange and other regulatory approvals will be obtained on the basis and timelines anticipated by the parties, (c) that the securities of Holdings and Partnership will be approved for listing on the NYSE and/or the TSX, as applicable (d) that the other conditions to the closing of the transactions will be satisfied, (e) that the combined company will successfully realize the operational and financial benefits described, including the realization of significant synergies, acceleration of international growth and generation of attractive cash flow, and (f) that the board of directors and management of the combined company will include the elements described under “Post-Transactions Organizational Structure – Corporate Governance and Management of Holdings”, including as a result of the continued willingness of the relevant individuals to serve in the roles and positions in question.

These forward-looking statements may be affected by risks and uncertainties in the business of Burger King Worldwide and Tim Hortons and market conditions, including that the assumptions upon which the forward-looking statements in this joint information statement/circular and the documents incorporated by reference herein are based may be incorrect in whole or in part. These forward-looking statements are qualified in their entirety by cautionary statements and risk factor disclosure contained in this joint information statement/circular under the sections captioned “Risk Factors” as well as in filings made by Burger King Worldwide and Tim Hortons with the SEC, including Burger King Worldwide’s annual report on Form 10-K for the year ended December 31, 2013 and Tim Hortons annual report on Form 10-K for the year ended December 29, 2013. Both Burger King Worldwide and Tim Hortons wish to caution readers that certain important factors may have affected and could in the future affect their actual results and could cause their actual results for subsequent

 

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periods to differ materially from those expressed in or implied by any forward-looking statement made by or on behalf of Burger King Worldwide or Tim Hortons, including that the transactions may not be consummated on the timelines anticipated by Burger King Worldwide and Tim Hortons or at all. The forward-looking information is made as of the date hereof and, except as required by law, neither Burger King Worldwide nor Tim Hortons undertakes any obligation to update forward-looking statements to reflect events or circumstances after the date hereof.

 

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THE COMPANIES

Description of Burger King Worldwide Parties

Burger King Worldwide and Tim Hortons have agreed to a transaction under the terms of the Arrangement Agreement and Plan of Merger dated August 26, 2014 by and among Tim Hortons, Burger King Worldwide, 1011773 B.C. Unlimited Liability Company, an unlimited liability company organized under the laws of British Columbia, New Red Canada Partnership, a general partnership organized under the laws of Ontario whose partnership interests are held either directly or indirectly by Holdings, Blue Merger Sub, Inc., a corporation incorporated under the laws of Delaware and a wholly owned subsidiary of Partnership, and 8997900 Canada Inc., a corporation organized under the laws of Canada and a wholly owned subsidiary of Partnership.

To effect the transaction, Amalgamation Sub will acquire Tim Hortons pursuant to a plan of arrangement under Canadian law, which will result in Tim Hortons becoming an indirect subsidiary of both Holdings and Partnership. Merger Sub will then merge with and into Burger King Worldwide, with Burger King Worldwide as the surviving corporation in the merger, which will result in Burger King Worldwide becoming an indirect subsidiary of both Holdings and Partnership. Holdings, which will be renamed and will become a corporation organized under the laws of Canada, will be the general partner of Partnership and will own a majority interest in Partnership (based on vote and value) as described below, with the balance of the partnership units of Partnership initially being held by the holders of Burger King Worldwide common stock prior to the effective time of the merger.

1011773 B.C. Unlimited Liability Company

Holdings is an unlimited liability company organized under the laws of British Columbia, formed on August 25, 2014 for the purpose of indirectly holding Tim Hortons and Burger King Worldwide following completion of the transactions. To date, Holdings has not conducted any activities other than those incident to its formation, the execution of the arrangement agreement, the entering into of arrangements in respect of Berkshire’s equity financing, and the taking of certain steps in connection with the transactions, including the preparation of applicable filings under the U.S. securities laws and regulatory filings made in connection with the transactions.

Holdings, which will be renamed and will become a corporation organized under the laws of Canada, will be the general partner of Partnership and will own a majority interest in Partnership (based on vote and value) as described below, with the balance of the partnership units of Partnership initially being held by the holders of Burger King Worldwide common stock prior to the effective time of the merger.

Following the consummation of the transactions, Burger King Worldwide and Tim Hortons will be indirect wholly owned subsidiaries of Holdings. Upon consummation of the transactions, the former stockholders and equity award holders of Burger King Worldwide are expected to own approximately 76% of the outstanding common equity of Holdings on a fully-diluted and fully exchanged basis, and the former shareholders of Tim Hortons and holders of Tim Hortons stock options, restricted stock units and performance stock units are expected to own approximately 22% of the outstanding common shares of Holdings on a fully-diluted and fully exchanged basis.

It is a mutual condition of the arrangement that as of the effective time of the transactions the Holdings common shares will be conditionally approved for listing on each of the NYSE and the TSX. Holdings’ principal executive offices are located at 1600-925 West Georgia Street, Vancouver, British Columbia, Canada V6C 3L2.

New Red Canada Partnership

Partnership is a general partnership organized under the laws of Ontario whose partnership interests are held either directly or indirectly by Holdings, formed for the purpose of indirectly holding Tim Hortons and Burger

 

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King Worldwide following completion of the transactions. Partnership was formed on August 25, 2014 as a general partnership and, in accordance with the arrangement agreement, Partnership will be registered as a limited partnership in accordance with the laws of the Province of Ontario generally, and the Ontario Limited Partnerships Act specifically. To date, Partnership has not conducted any activities other than those incident to its formation, the execution of the arrangement agreement and the taking of certain steps in connection thereto, including the preparation of applicable filings under the U.S. securities laws and regulatory filings made in connection with the transactions.

Following the consummation of the transactions, Burger King Worldwide and Tim Hortons will be direct or indirect wholly owned subsidiaries of Partnership. Holdings will be the initial general partner of Partnership.

It is a mutual condition of the arrangement that as of the effective time of the transactions the Partnership exchangeable units will be conditionally approved for listing on the TSX. Partnership’s principal executive offices are located at 155 Wellington Street West, Toronto, Ontario, Canada M5V 3J7.

8997900 Canada Inc.

Amalgamation Sub is a corporation organized under the laws of Canada and a wholly owned subsidiary of Partnership, formed on August 25, 2014. To date, Amalgamation Sub has not conducted any activities other than those incident to its formation, the execution of the arrangement agreement and the preparation of applicable filings under the U.S. securities laws and regulatory filings made in connection with the transactions.

Amalgamation Sub’s principal executive offices are located at 1600-925 West Georgia Street, Vancouver, British Columbia, Canada V6C 3L2.

Blue Merger Sub, Inc.

Merger Sub is a corporation incorporated under the laws of Delaware and a wholly owned subsidiary of Partnership, formed on August 25, 2014. To date, Merger Sub has not conducted any activities other than those incident to its formation, the execution of the arrangement agreement and the preparation of applicable filings under the U.S. securities laws and regulatory filings made in connection with the transactions.

Merger Sub’s principal executive offices are located at c/o Burger King Worldwide, Inc., 5505 Blue Lagoon Drive, Miami, FL 33126.

Burger King Worldwide

Burger King Worldwide, Inc. is a Delaware corporation formed on April 2, 2012. Burger King Worldwide common stock is traded on the NYSE under the symbol BKW. Burger King Worldwide’s principal executive offices are located at 5505 Blue Lagoon Drive, Miami, FL 33126, and its telephone number is (305) 378-3000.

Additional information regarding Burger King Worldwide and its subsidiaries is included in documents incorporated by reference into this joint information statement/circular. See “Where You Can Find More Information”.

Business of Burger King Worldwide

Overview

Burger King Worldwide is the indirect parent of Burger King Corporation, a Florida corporation that franchises and operates fast food hamburger restaurants, principally under the Burger King® brand. Burger King Worldwide is the world’s second largest fast food hamburger restaurant, or FFHR, chain as measured by the total number of restaurants. As of June 30, 2014, Burger King Worldwide owned or franchised a total of 13,808 restaurants in 98 countries and U.S. territories worldwide, of which approximately 100% were franchised. Burger King Worldwide’s restaurants are limited service restaurants that feature flame-grilled hamburgers, chicken and

 

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other specialty sandwiches, French fries, soft drinks and other affordably-priced food items. Burger King Worldwide believes its restaurants appeal to a broad spectrum of consumers, with multiple day parts and product platforms appealing to different customer groups. During Burger King Worldwide’s nearly 60 years of operating history, Burger King Worldwide has developed a scalable and cost-efficient quick service hamburger restaurant model that offers guests fast and delicious food.

Burger King Worldwide generates revenue from three sources: (1) franchise revenues, consisting primarily of royalties based on a percentage of sales reported by franchise restaurants and initial and renewal fees paid by franchisees, (2) property income from properties that we lease or sublease to franchisees, and (3) retail sales at Burger King Worldwide restaurants.

Burger King Worldwide believes that it can deliver value to its shareholders and enhance the Burger King® brand by focusing its efforts on the stewardship of its brand. During 2013, Burger King Worldwide completed its global refranchising initiative to sell its Burger King Worldwide restaurants to franchisees, and Burger King Worldwide believes it is one of the few pure franchise and real estate companies in its quick service restaurant, or QSR, peer group. Burger King Worldwide believes that its fully franchised business model will permit it to focus on narrowing the average restaurant sales gap with its peers, through menu innovation, franchisee operational support and brand development while yielding additional benefits, such as accelerating international expansion, helping to drive restaurant remodeling, maximizing capital efficiency and increasing its profitability and cash flow.

Additional information regarding Burger King Worldwide and its subsidiaries is included in documents incorporated by reference into this document. See “Where you can find more information”.

Description of Tim Hortons

Tim Hortons Inc. is a Canadian corporation. Tim Hortons shares trade on the TSX under the symbol THI, and on the NYSE also under the symbol THI. Tim Hortons principal executive offices are located at 874 Sinclair Road, Oakville, Ontario, Canada L6K 2Y1 and its telephone number is (905) 845-6511.

Additional information regarding Tim Hortons and its subsidiaries is included under “The Companies—Business of Tim Hortons” and in documents incorporated by reference into this document. See “Where You Can Find More Information”. More information about Tim Hortons can also be obtained at www.timhortons.com.

Business of Tim Hortons

Tim Hortons Inc., a Canadian corporation headquartered in Oakville, Ontario, is one of the largest publicly-traded QSR chains in North America based on market capitalization and the largest in Canada based on systemwide sales and number of locations. Tim Hortons restaurants appeal to a broad range of consumer tastes, with a menu that includes Tim Hortons premium blend coffee, espresso-based hot and cold specialty drinks (including lattes, cappuccinos and espresso shots), iced cappuccinos, specialty and steeped teas, cold beverages, fruit smoothies, home-style soups, chili, grilled panini and classic sandwiches, wraps, yogurt and berries, oatmeal, breakfast sandwiches and wraps, and fresh baked goods, including donuts, Timbits®, bagels, muffins, cookies, croissants, Danishes, pastries and more.

The first Tim Hortons® restaurant was opened in 1964 by Tim Horton, a National Hockey League All-Star defenseman. In 1967, Tim Horton and Ron Joyce, then the operator of three Tim Hortons restaurants, became partners and together they opened 37 restaurants over the next seven years until Mr. Horton’s death in 1974. Mr. Joyce became the sole owner in 1975. In the early 1990s, Tim Hortons and Wendy’s®, now owned by The Wendy’s Company, which we refer to as “Wendy’s”, entered into a partnership to develop real estate and combination restaurant sites with Wendy’s and Tim Hortons restaurants under the same roof. In 1995, Wendy’s purchased Mr. Joyce’s interest in the Tim Hortons system and incorporated the company known as Tim Hortons Inc., a Delaware corporation, which we refer to as THI USA, as a wholly owned subsidiary. In 2006, Tim

 

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Hortons became a standalone public company pursuant to an initial public offering and a subsequent spin-off of Tim Hortons common shares to Wendy’s stockholders through a stock dividend in September 2006.

In September 2009, THI USA was reorganized such that Tim Hortons Inc., a corporation incorporated under the CBCA, became the publicly held parent company of the group of companies previously controlled by THI USA, and each outstanding share of THI USA’s common stock automatically converted into one common share of the Canadian public company.

Tim Hortons primary business model is to identify potential restaurant locations, develop suitable sites, and make these new restaurants available to approved restaurant owners. Selectively, where it may complement Tim Hortons growth strategies, Tim Hortons will also seek to enter into strategic relationships with restaurant owners that will complement Tim Hortons development with their own capital deployment, site selection, and development. These relationships permit the development of Tim Hortons restaurants without Tim Hortons capital being deployed, as the restaurant owner controls the real estate.

As at the date of this document, restaurant owners operated substantially all of Tim Hortons systemwide restaurants. Tim Hortons directly owns and operates (without restaurant owners) only a small number of company restaurants in Canada and the United States. Tim Hortons also has significant supply chain operations, including procurement, warehousing and distribution, to supply paper and dry goods to a substantial majority of Tim Hortons Canadian restaurants, and procure and supply frozen baked goods and some refrigerated products to most of Tim Hortons Ontario and Quebec restaurants. In the United States, Tim Hortons supplies similar products to system restaurants through third-party distributors. Tim Hortons operations also include coffee roasting plants in Rochester, New York, and Hamilton, Ontario, and a fondant and fills manufacturing facility in Oakville, Ontario. These vertically integrated manufacturing, warehouse, and distribution capabilities benefit Tim Hortons restaurant owners and are important elements of Tim Hortons business model which allow Tim Hortons to improve product quality and consistency; protect proprietary interests; facilitate the expansion of Tim Hortons product offerings; control availability and timely delivery of products; provide economies of scale and labor efficiencies; and generate additional sources of income and financial returns.

Additional information regarding Tim Hortons and its subsidiaries is included in documents incorporated by reference into this document. See “Where You Can Find More Information”.

 

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FINANCIAL INFORMATION

Selected Historical Consolidated Financial Data of Burger King Worldwide

On October 19, 2010 (the “Acquisition Date”), Burger King Holdings was acquired by 3G Capital in a transaction accounted for as a business combination (the “3G Acquisition”). Unless the context otherwise requires, all references to Burger King Worldwide and “Successor” refer to Burger King Worldwide and its subsidiaries, collectively, for all periods subsequent to the 3G Acquisition. All references in this section to “Predecessor” refer to Burger King Holdings, Inc. (“Holdings”) and its subsidiaries for all periods prior to the 3G Acquisition, which operated under a different ownership and capital structure. In addition, the 3G Acquisition was accounted for under the acquisition method of accounting, which resulted in purchase price allocations that affect the comparability of results of operations for periods before and after the 3G Acquisition.

The following tables present Burger King Worldwide’s selected historical consolidated financial and other data for Burger King Worldwide and its predecessor as of the dates and for each of the periods indicated.

All references to 2013, 2012 and 2011 in this section are to the years ended December 31, 2013, December 31, 2012 and December 31, 2011, respectively. The selected historical financial data as of December 31, 2013, December 31, 2012 and for 2013, 2012 and 2011 have been derived from Burger King Worldwide’s audited consolidated financial statements and notes thereto incorporated herein by reference. All references to the Transition Period are to December 31, 2010 and to the six months ended December 31, 2010, derived by adding the results of operations of the Burger King Worldwide Predecessor from July 1, 2010 through October 18, 2010 to the results of operations of Burger King Worldwide from October 19, 2010 through December 31, 2010. The selected historical financial data for the Transition Period have been derived from audited consolidated financial statements and the notes thereto not incorporated herein by reference. All references to Fiscal 2010 and 2009 refer to the Burger King Worldwide Predecessor’s fiscal years ended June 30, 2010 and June 30, 2009. The selected historical financial data as of December 31, 2011, June 30, 2010 and June 30, 2009 and for Fiscal 2010 and 2009 have been derived from audited consolidated financial statements and the notes thereto not incorporated herein by reference. All references to June 30, 2014 and 2013 and the six months ended June 30, 2014 and 2013 have been derived from unaudited condensed consolidated Financial Statements and the notes thereto not incorporated herein by reference.

 

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The selected historical consolidated financial and other operating data included below and elsewhere in this report are not necessarily indicative of future results. The information presented below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Burger King Worldwide” included in this joint information statement/circular. This information should also be read in conjunction with the unaudited pro forma consolidated combined financial statements.

 

    Successor   Predecessor  
                                  Transition Period              
    Six Months
Ended
June 30,
   

 

   

 

   

 

    October 19,
2010
to
December 31,
   

 

  July 1, 2010
to
October 18,
    Fiscal  
    2014     2013     2013     2012     2011     2010          2010     2010     2009  
   

(In millions, except per share data)

 

Statement of Operations Data:

                     

Revenues:

                     

Company restaurant revenues

  $ 36.8      $ 173.8      $ 222.70      $ 1,169.00      $ 1,638.70      $ 331.70          $ 514.50      $ 1,839.30      $ 1,880.50   

Franchise and property revenues

    465.3        432.2        923.60        801.90        701.20        135.10            203.20        662.90        656.90   

Total revenues

    502.1        606.0        1,146.30        1,970.90        2,339.90        466.80            717.70        2,502.20        2,537.40   

Income (loss) from operations (1)

    282.8        235.6        522.20        417.70        362.50        (85.80         101.50        332.90        339.40   

Net income (loss) (1)

  $ 135.5      $ 98.7      $ 233.70      $ 117.70      $ 88.10      $ (115.70       $ 71.10      $ 186.80      $ 200.10   

Earnings (loss) per common share:

                     

Basic

  $ 0.38      $ 0.28      $ 0.67      $ 0.34      $ 0.25      $ (0.33       $ 0.52      $ 1.38      $ 1.48   

Diluted

  $ 0.38      $ 0.28      $ 0.65      $ 0.33      $ 0.25      $ (0.33       $ 0.52      $ 1.36      $ 1.46   

Dividends per common share

  $ 0.14      $ 0.11      $ 0.24      $ 0.04      $ 1.13      $ —            $ 0.06      $ 0.25      $ 0.25   

Other Financial Data:

                     

Net cash provided by (used for) operating activities

  $ 213.1      $ 130.2      $ 325.20      $ 224.40      $ 406.20      $ (126.50       $ 121.30      $ 310.40      $ 310.80   

Net cash provided by (used for) investing activities

    (6.6     36.2        43.00        33.60        (41.40     (3,344.60         (4.80     (134.90     (242.00

Net cash provided by (used for) financing activities

    (87.6     (57.9     (132.7     (174.6     (108.0     3,396.4            (29.5     (96.9     (105.5

Capital expenditures

    7.2        8.6        25.5        70.2        82.1        28.4            18.2        150.3        204.0   

 

    Successor   Predecessor  
    As of June 30,     December 31,   June 30,  
    2014     2013     2013     2012     2011     2010          2010     2009  
   

(In millions)

                 

Balance Sheet Data:

                   

Cash and cash Equivalents

  $ 904.7      $ 654.1      $ 786.9      $ 546.7      $ 459.0      $ 207.0          $ 187.6      $ 121.7   

Total assets (2)

    5,754.1        5,663.5        5,828.5        5,564.0        5,608.4        5,686.2            2,747.2        2,707.1   

Total debt and capital lease obligations (2)

    3,024.1        3,044.6        3,037.0        3,049.3        3,139.2        2,792.1            826.3        888.9   

Total liabilities (2)

    4,216.6        4,347.9        4,312.3        4,389.0        4,559.2        4,239.0            1,618.8        1,732.3   

Total stockholders’ equity (2)

    1,537.5        1,315.6        1,516.2        1,175.0        1,049.2        1,447.2            1,128.4        974.8   

 

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    Successor     Transition
Period
         Predecessor  
          Six Months
Ended
December 31,
         Fiscal  
    2013     2012     2011     2010          2010     2009  
    (In millions)  

Other Operating Data:

               

System-wide sales growth (3)(4)

    4.2     5.7     1.7     2.2         2.1     4.2

Comparable sales growth (3)(4)(5)

    0.5     3.2     (0.5 )%      (2.7 )%          (2.3 )%      1.2

Franchise Sales (in millions) (4)

  $ 16,078.3      $ 14,672.5      $ 13,653.4      $ 6,721.2          $ 13,055.3      $ 12,788.7   

Company Restaurant Margin Percentage (6)

    12.3     11.3     11.7     12.9         12.2     12.6

 

(1) Amount includes $26.2 million of global portfolio realignment project costs for 2013. Amount includes $30.2 million of global portfolio realignment project costs and $27.0 million of business combination agreement expenses for 2012. Amount includes $3.7 million of 2010 transactions costs, $46.5 million of global restructuring and related professional fees, $10.6 million of field optimization project costs and $7.6 million of global portfolio realignment project costs for 2011. Amount includes $94.9 million of 2010 transactions costs and $67.2 million of global restructuring and related professional fees for October 19, 2010 to December 31, 2010.
(2) Amounts in the successor periods reflect the application of acquisition accounting as a result of the 3G Acquisition.
(3) Comparable sales growth and system-wide sales growth are analyzed on a constant currency basis, which means they are calculated by translating prior year results at current year average exchange rates, to remove the effects of currency fluctuations from these trend analyses. We believe these constant currency measures provide a more meaningful analysis of our business by identifying the underlying business trends, without distortion from the effect of foreign currency movements.
(4) Unless otherwise stated, comparable sales growth and system-wide sales growth are presented on a system-wide basis, which means they include Company restaurants and franchise restaurants. Franchise sales represent sales at all franchise restaurants and are revenues to our franchisees. We do not record franchise sales as revenues; however, our royalty revenues are calculated based on a percentage of franchise sales. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Business Metrics” in Part II, Item 7 of Burger King Worldwide’s Annual Report on Form 10-K incorporated herein by reference.
(5) Comparable sales growth refers to the change in restaurant sales in one period from the same prior year period for restaurants that have been opened for thirteen months or longer.
(6) Company restaurant margin is derived by subtracting Company restaurant expenses from Company restaurant revenues, which we analyze as a percentage of Company restaurant revenues, a metric we refer to as Company Restaurant Margin Percentage.

 

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Selected Historical Consolidated Financial Data of Tim Hortons

The following table sets forth selected consolidated financial information for Tim Hortons. The selected historical consolidated financial data has been derived from the Tim Hortons audited consolidated financial statements for the years ended December 29, 2013, December 30, 2012, which are incorporated herein by reference, and for the years ended January 1, 2012, January 2, 2011 and January 3, 2010. The selected condensed consolidated statement of operations data for the six months ended June 30, 2013 and June 29, 2014, and the selected condensed consolidated balance sheet data as of June 29, 2014 have been derived from the Tim Hortons unaudited condensed consolidated financial statements incorporated herein by reference. The following information should be read together with Tim Hortons Annual Report on Form 10-K for the year ended December 29, 2013, Tim Hortons Quarterly Report on Form 10-Q for the quarter ended June 29, 2014 and other information that Tim Hortons has filed with the SEC and incorporated herein by reference. See “Where You Can Find More Information”.

 

    Fiscal Years (1)(2)     Year-to-date period ended     As of and for the
Second Quarter Ended
 
    2009     2010     2011     2012     2013     June 30,
2013
    June 29,
2014
 
    (in thousands of Canadian dollars, except per share data,
number of restaurants, and otherwise where noted)
 

Consolidated Statements of Operations Data

             

Revenues

         

Sales

  $ 1,704,065      $ 1,755,244      $ 2,012,170      $ 2,225,659      $ 2,265,884      $ 1,092,449      $ 1,154,859   

Franchise revenues:

         

Rents and royalties (3)

    644,755        687,039        733,217        780,992        821,221        396,743        424,462   

Franchise fees

    90,033        94,212        107,579        113,853        168,428        42,484        61,428   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    734,788        781,251        840,796        894,845        989,649        439,227        485,890   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

    2,438,853        2,536,495        2,852,966        3,120,504        3,255,533        1,531,676        1,640,749   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Corporate reorganization expenses

    —          —          —          18,874        11,761        10,079        —     

De-branding costs (4)

    —          —          —          —          19,016        —          —     

Asset impairment and closure costs, net (5)

    —          28,298        372        (372     2,889        —          —     

Other costs and expenses

    1,913,251        1,997,034        2,283,119        2,507,477        2,600,772        1,217,101        1,303,095   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

    1,913,251        2,025,332        2,283,491        2,525,979        2,634,438        1,227,180        1,303,095   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gain on sale of interest in Maidstone Bakeries (6)

    —          361,075        —          —          —          —          —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

    525,602        872,238        569,475        594,525        621,095        304,496        337,654   

Interest expense, net

    19,184        24,180        25,873        30,413        35,466        15,866        33,209   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

    506,418        848,058        543,602        564,112        585,629        288,630        304,445   

Income taxes

    186,606        200,940        157,854        156,346        156,980        77,145        86,658   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

  $ 319,812      $ 647,118      $ 385,748      $ 407,766      $ 428,649      $ 211,485      $ 217,787   

Net income attributable to non controlling interests

  $ 23,445      $ 23,159      $ 2,936      $ 4,881      $ 4,280      $ 1,578      $ 3,128   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Tim Hortons Inc.

  $ 296,367      $ 623,959      $ 382,812      $ 402,885      $ 424,369      $ 209,907      $ 214,659   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings per common share attributable to Tim Hortons Inc.

  $ 1.64      $ 3.58      $ 2.35      $ 2.59      $ 2.82      $ 1.37      $ 1.57   

Weighted average number of common shares outstanding—diluted

    180,609        174,215        162,597        155,676        150,622        153,133        136,477   

Dividends per common share

  $ 0.40      $ 0.52      $ 0.68      $ 0.84      $ 1.04      $ 0.52      $ 0.64   

Consolidated Balance Sheets Data

         

Cash and cash equivalents

  $ 121,653      $ 574,354      $ 126,497      $ 120,139      $ 50,414      $ 86,603      $ 25,087   

Restricted cash and cash equivalents and Restricted investments

  $ 80,815      $ 105,080      $ 130,613      $ 150,574      $ 155,006      $ 104,780      $ 85,926   

Total assets

  $ 2,094,291      $ 2,481,516      $ 2,203,950      $ 2,284,179      $ 2,433,823      $ 2,264,886      $ 2,356,753   

Total debt and capital leases (7)

  $ 411,694      $ 437,348      $ 457,290      $ 531,484      $ 981,851      $ 544,503      $ 1,463,419   

Total liabilities

  $ 838,605      $ 1,039,074      $ 1,049,517      $ 1,094,088      $ 1,672,304      $ 1,029,025      $ 1,972,351   

Total equity

  $ 1,255,686      $ 1,442,442      $ 1,154,433      $ 1,190,091      $ 761,519      $ 1,235,861      $ 384,402   

 

(1) Fiscal years include 52 weeks, except for fiscal 2009, which included 53 weeks.
(2) Tim Hortons selected historical consolidated financial data has been derived from its audited financial statements for the years ended December 29, 2013, December 30, 2012, January 1, 2012, January 2, 2011 and January 3, 2010.

 

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(3) Rents and royalties revenues includes advertising levies primarily associated with the Canadian Advertising Fund’s Expanded Menu Board Program. Franchised restaurant sales are reported to Tim Hortons by its restaurant owners and are not included in its Consolidated Financial Statements, other than Non-owned restaurants consolidated pursuant to applicable accounting rules. Franchised restaurant sales do, however, result in royalties and rental revenues, which are included in Tim Hortons’ franchise revenues, as well as distribution sales. The reported franchised restaurant sales for the last five years were:

 

     Fiscal Years (1)(2)      Year-to-date
period ended
 
     2009      2010      2011      2012      2013      June 30,
2013
     June 29,
2014
 
     (in millions)                

Franchised restaurant sales:

                    

Canada (Canadian dollars)

   $ 4,881       $ 5,182       $ 5,564       $ 5,907       $ 6,152       $ 2,979       $ 3,134   

U.S. (U.S. dollars)

   $ 410       $ 439       $ 473       $ 532       $ 587       $ 283       $ 312   

 

(4) In Canada, after evaluation of strategic considerations and the overall performance of the Cold Stone Creamery® business in Tim Hortons’ locations, Tim Hortons made the decision to remove the Cold Stone Creamery brand from Tim Hortons restaurants in Canada, and recognized a related charge in fiscal 2013 as a result of this initiative.
(5) In fiscal 2010, Tim Hortons recognized an impairment in our Portland, Providence and Hartford markets, and closed 34 restaurants and 18 self-serve kiosks in our Hartford and Providence markets and two restaurants in Tim Hortons’ Portland market.
(6) Tim Hortons sold its 50% joint-venture interest in Maidstone Bakeries in October 2010.
(7) Long-term debt includes long-term debt associated with the Canadian Advertising Fund’s Expanded Menu Board Program and capital leases, including their current portions.

Management’s Discussion and Analysis of Financial Condition and Results of Operations of Burger King Worldwide

The Management’s Discussion and Analysis of Financial Condition and Results of Operations of Burger King Worldwide is incorporated by reference to Burger King Worldwide’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, filed with the SEC on February 21, 2014.

Management’s Discussion and Analysis of Financial Condition and Results of Operations of Tim Hortons

The Management’s Discussion and Analysis of Financial Condition and Results of Operations of Tim Hortons is incorporated by reference to Tim Hortons Annual Report on Form 10-K for the fiscal year ended December 29, 2013, filed with the SEC on February 25, 2014.

Selected Unaudited Pro Forma Financial Information

The following selected unaudited pro forma condensed consolidated financial information (“pro forma information”) give effect to the acquisition of Tim Hortons. The selected pro forma information has been prepared using the acquisition method of accounting under U.S. GAAP, under which the assets and liabilities of Tim Hortons will be recorded by Burger King Worldwide at their respective fair values as of the date the acquisition is completed. The selected unaudited pro forma condensed consolidated balance sheet data as of June 30, 2014 gives effect to the transaction as if it had occurred on June 30, 2014. The selected unaudited pro forma condensed consolidated statements of operations for the six months ended June 30, 2014 and the year ended December 31, 2013 give effect to Holdings’ results of operations as if the transaction had occurred on January 1, 2013.

The selected pro forma information have been derived from, and should be read in conjunction with, the more detailed unaudited pro forma condensed consolidated financial information (“pro forma statements”) of the combined company appearing elsewhere in this joint information statement/circular and the accompanying notes to the pro forma statements. In addition, the pro forma statements were based on, and should be read in conjunction with, the historical consolidated financial statements and related notes of both Burger King Worldwide and Tim Hortons for the applicable periods, which have been incorporated by reference in this joint

 

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information statement/circular by reference. See “Unaudited Pro Forma Condensed Consolidated Financial Information” in this joint information statement/circular for additional information. The selected pro forma information has been presented for informational purposes only and are not necessarily indicative of what the combined company’s financial position or results of operations actually would have been had the acquisition been completed as of the dates indicated. In addition, the selected pro forma information do not purport to project the future financial position or operating results of the combined company. Also, as explained in more detail in the accompanying notes to the pro forma statements, the preliminary fair values of assets acquired and liabilities assumed reflected in the selected pro forma information are subject to adjustments and may vary significantly from the fair values that will be recorded upon completion of the acquisition.

Selected Unaudited Pro Forma Condensed Consolidated Statements of Operations

 

     Year Ended
December 31,
2013
    Six Months
Ended
June 30, 2014
 
     (in millions, except per share data)  

Total revenues

   $ 4,307.6      $ 1,998.3   

Net earnings (loss) attributable to common shareholders

     (385.7     99.4   

Earnings (loss) per common share—basic

     (0.84     0.22   

Earnings (loss) per common share—diluted

     (0.84     0.21   

Weighted average number of common shares outstanding—basic

     457.5        458.8   

Weighted average number of common shares outstanding—diluted

     457.5        475.8   

Selected Pro Forma Non-GAAP Financial Data

 

     Year Ended
December 31,
2013
     Six Months
Ended
June 30, 2014
 
     (in millions, except per share data)  

EBITDA (1)

   $ 1,325.4       $ 685.4   

Adjusted EBITDA (1)

   $ 1,447.4       $ 719.6   

Adjusted Net Income attributable to common shareholders (2)

   $ 316.1       $ 160.8   

Adjusted diluted earnings per share (2)

   $ 0.67       $ 0.34   

Selected Unaudited Pro Forma Condensed Consolidated Balance Sheet Data

 

     As of  
     June 30, 2014  
     (in millions)  

Total assets

   $ 19,692.7   

Total debt and capital lease obligations

     9,265.3   

Preferred stock

     2,758.3   

Total stockholder’s equity

     4,936.0   

 

(1)

Pro forma EBITDA is defined as pro forma net income before interest expense, net, income tax expense and depreciation and amortization. Pro forma adjusted EBITDA is defined as pro forma EBITDA excluding the impact of non-cash compensation expense, global portfolio realignment project costs, corporate reorganization expenses, de-branding costs, net impact of equity method investments and other operating expenses (income), net. Pro forma adjusted EBITDA is used by management to measure operating performance of the business, excluding specifically identified items that management believes do not directly reflect our core operations. Pro forma EBITDA and pro forma adjusted EBITDA are not calculated in accordance with the rules of Article 11 of Regulation S-X and may not be comparable to similarly titled

 

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  measures of other companies. Management believes that the presentation of pro forma EBITDA and pro forma adjusted EBITDA and the ratios using pro forma EBITDA and pro forma adjusted EBITDA included in this Offering Memorandum are useful to investors, analysts and other external users of our consolidated financial statements because they are widely used by investors to measure operating performance without regard to items such as income taxes, net interest expense, depreciation and amortization, non-cash stock compensation expense and other infrequent or unusual items, which can vary substantially from company to company depending upon accounting methods and book value of assets, financing methods, capital structure and the method by which assets were acquired.
(2) Pro forma adjusted net income is defined as pro forma net income excluding net income attributable to noncontrolling interest, income tax expense, franchise agreement amortization, amortization of deferred financing costs, share-based compensation and non-cash incentive compensation expense, global portfolio realignment project costs, corporate reorganization expenses, de-branding costs, equity method investment expense (income) and other operating expenses (income), net and including the adjusted income tax expense. Pro forma adjusted diluted earnings per share is calculated by dividing pro forma adjusted net income attributable to common shareholders by the number of pro forma diluted weighted average shares of the Company during the reporting period. Pro forma adjusted net income and pro forma adjusted diluted earnings per share are performance measures that provide supplemental information we believe is useful to analysts and investors to evaluate our ongoing results of operations, when considered alongside other GAAP measures such as net income, income from operations and total revenues.

The following table is a reconciliation of our pro forma net income to pro forma EBITDA and pro forma adjusted EBITDA:

 

     Year Ended
December 31,
2013
     Six Months Ended
June 30,

2014
 
     (in millions)  

Pro forma EBITDA and pro forma adjusted EBITDA

     

Pro forma net income

   $ 423.0       $ 234.4   

Net income attributable to noncontrolling interest

     4.2         2.9   

Pro forma interest expense, net

     491.7         244.8   

Pro forma income tax expense

     192.3         103.9   

Pro forma depreciation and amortization

     232.0         109.5   
  

 

 

    

 

 

 

Pro forma EBITDA including VIEs

     1,343.2         695.5   

Pro forma EBITDA attributable to VIEs (3)

     17.8         10.1   
  

 

 

    

 

 

 

Pro forma EBITDA

     1,325.4         685.4   

Adjustments:

     

Non-cash compensation expense (4)

     30.3         12.6   

Global portfolio realignment project costs (5)

     26.2         —     

Corporate reorganization expenses (6)

     11.4         —     

De-branding costs (7)

     18.5         —     

Net impact of equity method investments (8)

     12.4         9.9   

Other operating expenses (income), net

     23.2         11.7   
  

 

 

    

 

 

 

Total adjustments

     122.0         34.2   
  

 

 

    

 

 

 

Pro forma adjusted EBITDA

   $ 1,447.4       $ 719.6   
  

 

 

    

 

 

 

 

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The following table is a reconciliation of our pro forma net income to pro forma adjusted net income and the calculation of pro forma diluted earnings per share:

 

     Year Ended
December 31,
2013
    Six Months Ended
June 30,

2014
 
     (in millions, except per share data)  

Pro forma adjusted net income attributable to common shareholders

    

Pro forma net income

   $ 423.0      $ 234.4   

Income tax expense

     192.3        103.9   
  

 

 

   

 

 

 

Income before income taxes

     615.3        338.3   

Adjustments:

    

Amortization (9)

     60.1        30.0   

Non-cash compensation expense (4)

     30.3        12.6   

Global portfolio realignment project costs (5)

     26.2        —     

Corporate reorganization expenses (6)

     11.4        —     

De-branding costs (7)

     18.5        —     

Net impact of equity method investment (5)(8)

     12.4        9.9   

Other operating expenses (income), net

     23.2        11.7   
  

 

 

   

 

 

 

Total adjustments

     182.1        64.2   

Pro forma adjusted income before income taxes

     797.4        402.5   
  

 

 

   

 

 

 

Pro forma adjusted income tax expense (10)

     211.3        106.7   
  

 

 

   

 

 

 

Pro forma adjusted net income

     586.1        295.8   
  

 

 

   

 

 

 

Pro forma preferred stock dividends (11)

     (270.0     (135.0
  

 

 

   

 

 

 

Pro forma adjusted net income attributable to common shareholders

   $ 316.1      $ 160.8   
  

 

 

   

 

 

 

Pro forma adjusted diluted earnings per share

   $ 0.67      $ 0.34   
  

 

 

   

 

 

 

Pro forma diluted weighted average shares outstanding (12)

     474.1        475.8   
  

 

 

   

 

 

 

 

(3) Tim Hortons is the primary beneficiary of certain variable interest entities (“VIEs”) principally arising from certain arrangements in which an operator acquires the right to operate a restaurant, but Tim Hortons continues to own the restaurant’s assets and has the right to assume management upon a default of the operator. VIEs also include the results of the Tim Hortons Canadian Advertising Funds’ program to acquire LCD screwens, media engines, drive-thru menu boards and ancillary equipment in Tim Hortons restaurants.
(4) Represents the aggregate of (i) share-based compensation expense associated with employee stock options for the periods indicated and (ii) the portion of annual non-cash incentive compensation that eligible employees elected to receive, or are expected to elect to receive, as common equity in lieu of their 2013 and 2014 cash bonus, respectively.
(5) Represents costs associated with the project to realign Burger King Worldwide global restaurant portfolio by refranchising Company-owned restaurants and establishing strategic partners and joint ventures to accelerate development. These costs primarily include severance related costs and fees for professional services. The project was completed in 2013.
(6) Represents costs associated with the realignment of roles and responsibilities under Tim Hortons’ new organizational structure, which includes a Corporate Centre and Business Unit. The project was completed in 2013.
(7) After evaluation of strategic considerations and the overall performance of the Cold Stone Creamery business in Tim Hortons locations, Tim Hortons made the decision to remove the Cold Stone Creamery brand from Tim Hortons restaurants in Canada, and, subject to satisfactory conclusion of negotiations, intends to enter into a mutual termination agreement with Kahala Franchise Corp. with respect to the Cold Stone Creamery brand in Canada. As a result of this decision, the Company recognized charges in fiscal 2013 , consisting of payments to restaurant owners to restore their locations, accelerated depreciation and amortization of related long-lived assets, and other related expenses.

 

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(8) Represents the net impact of (i) exclusion of our proportionate share of the net (income) loss recognized by our equity method investments, $(2.0) million and $3.2 million for the year ended December 31, 2013 and the six months ended June 30, 2014, respectively, and (ii) inclusion of cash distributions received from our equity method investments of $14.4 million and $6.7 million for the year ended December 31, 2013 and the six months ended June 30, 2014, respectively.
(9) Represents amortization of franchise agreement of $30.4 million and $15.2 million and amortization of deferred financing costs of $29.7 million and $14.9 million for the year ended December 31, 2013 and six months ended June 30, 2014, respectively.
(10) The pro forma adjusted income tax expense reflects the tax effect of the pro forma adjusted income before income taxes using a statutory tax rate of approximately 26.5%.
(11) Reflects preferred stock dividends related to the $3,000.0 million investment from Berkshire Hathaway in exchange for 30,000 Class A 9.00% Cumulative Compounding Perpetual preferred shares and warrants to purchase 8.4 million shares equal to 1.75% of the issued and outstanding shares of Holdings. Amount excludes adjustment to the initial carrying value of the preferred stock to record it at the redemption value.
(12) See “Unaudited Pro Forma Condensed Consolidated Financial Information” for a calculation of pro forma diluted weighted average shares outstanding for the year ended December 31, 2013 and the six months ended June 30, 2014.

Comparative Per Share Data

The following tables set forth certain historical, pro forma and pro forma equivalent per share financial information for shares of Burger King Worldwide common stock and Tim Hortons common shares. The following information should be read in conjunction with the audited financial statements of Burger King Worldwide and Tim Hortons, which are included and incorporated by reference in this joint proxy statement/prospectus, and the financial information contained in the “Unaudited Pro Forma Condensed Consolidated Financial Statements”, “Selected Historical Consolidated Financial Data of Burger King Worldwide” and “Selected Historical Consolidated Financial Data of Tim Hortons” sections of this joint proxy statement/prospectus. The unaudited pro forma information below is presented for informational purposes only and is not necessarily indicative of the operating results or financial position that would have occurred if the transactions had been completed as of the periods presented, nor is it necessarily indicative of the future operating results or financial position of the combined company. In addition, the unaudited pro forma information does not purport to indicate balance sheet data or results of operations data as of any future date or for any future period.

 

     As of and for the six
months ended June 30,
2014 (1)
     As of and for the year
ended December 31,
2013 (2)
 

BKW Historical Data Per Common Share ($)

     

Basic earnings per common share from continuing operations

   $ 0.38       $ 0.67   

Diluted earnings per common share from continuing operations

   $ 0.38       $ 0.65   

Dividends per common share

   $ 0.14       $ 0.24   

Book value per basic common share

   $ 4.36       $ 4.32   

Book value per diluted common share

   $ 4.28       $ 4.24   

THI Historical Data Per Common Share (C$)

     

Basic earnings per common share from continuing operations

   $ 1.58       $ 2.83   

Diluted earnings per common share attributable to THI

   $ 1.57       $ 2.82   

Dividends per common share

   $ 0.64       $ 1.04   

Book value per basic common share

   $ 2.83       $ 5.07   

Book value per diluted common share

   $ 2.82       $ 5.06   

Condensed Consolidated Pro Forma Data Per Common Share

     

Basic earnings (loss) per common share from continuing operations

   $ 0.22       $
(0.84

Diluted earnings (loss) per common share from continuing operations

   $ 0.21       $
(0.84

 

(1) THI information provided as of June 29, 2014
(2) THI information provided as of December 29, 2013

 

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Book Value per Common Share Calculation

 

     BKW      THI  
     Basic      Diluted          Basic              Diluted      

YTD June 30, 2014

           

BV / Equity

   $ 1,537.50       $ 1,537.50       $ 384       $ 384   

Common Shares

     352.3         359.3         136         136   

BV Per Common Share

   $ 4.36       $ 4.28       $ 2.82       $ 2.82   

YE December 31, 2013

           

BV / Equity

     1,516.20         1,516.20       $ 762       $ 762   

Common Shares

     351         357.8         150         151   

BV Per Common Share

   $ 4.32       $ 4.24       $ 5.08       $ 5.05   

Comparative Per Share Market Price Data and Dividend Information

Shares of Burger King Worldwide common stock are listed and traded on the NYSE under the symbol BKW. Tim Hortons common shares are listed and traded on the TSX and the NYSE under the symbol THI. The following table sets forth, for the calendar quarters indicated, the high and low sales prices per share of shares of Burger King Worldwide common stock, as reported on NYSE, and of Tim Hortons common shares, as reported on the NYSE and the TSX.

 

    NYSE Burger King Worldwide(1)     NYSE Tim Hortons(1)     TSX Tim Hortons(1)  
    High
     (U.S. $)     
    Low
     (U.S. $)     
    High
     (U.S. $)     
    Low
     (U.S. $)     
    High
    (C $)    
    Low
    (C $)    
 

For the quarterly period:

           

2012(1)

           

First Quarter

    N/A        N/A      $ 55.31      $ 46.55      $ 54.92      $ 47.36   

Second Quarter(2)

  $ 15.85      $ 14.97      $ 58.47      $ 50.43      $ 57.91      $ 56.90   

Third Quarter

  $ 15.88      $ 13.03      $ 55.02      $ 49.59      $ 55.73      $ 49.62   

Fourth Quarter

  $ 17.74      $ 14.10      $ 53.91      $ 45.41      $ 52.60      $ 45.11   

2013(1)

           

First Quarter

  $ 19.95      $ 16.26      $ 54.62      $ 47.76      $ 55.50      $ 47.83   

Second Quarter

  $ 21.00      $ 17.90      $ 58.01      $ 51.86      $ 58.85      $ 53.25   

Third Quarter

  $ 20.42      $ 18.97      $ 59.72      $ 53.74      $ 61.52      $ 56.06   

Fourth Quarter

  $ 22.86      $ 18.91      $ 61.46      $ 56.77      $ 64.18      $ 58.67   

2014(3)

           

First Quarter

  $ 27.52      $ 22.03      $ 58.47      $ 50.67      $ 62.80      $ 56.11   

Second Quarter

  $ 27.18      $ 24.92      $ 56.67      $ 53.76      $ 62.38      $ 57.76   

Third Quarter (through September 12, 2014)

  $ 33.82      $ 26.05      $ 82.16      $ 54.23      $ 92.73      $ 57.89   

 

(1) 2012 and 2013 information sourced from each company’s respective 2013 10K.
(2) Represents period from June 20, 2012 through the end of the quarter, as this was the date Burger King Worldwide common stock was first listed.
(3) 2014 NYSE information sourced from Yahoo! Finance and TSX information pulled from TMXMoney.com. Burger King Worldwide high and low sales prices per share information is based off of adjusted close amounts. Tim Hortons information is based on any point in time (unadjusted). Additionally, high and low sales prices per share information assumes strict calendar-based quarters for both Burger King Worldwide and Tim Hortons.

 

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The following table sets forth, for the months indicated, the high and low sales prices per share of shares of Burger King Worldwide common stock, as reported on the NYSE, and of Tim Hortons common shares, as reported on the NYSE and the TSX. In addition, the table also sets forth the average daily trading volume of the relevant security on such exchange.

 

     NYSE Burger King Worldwide(1)      NYSE Tim Hortons(1)      TSX Tim Hortons(1)  
     High
(U.S. $)
     Low
(U.S. $)
     Average
Volume
     High
(U.S. $)
     Low
(U.S. $)
     Average
Volume
     High
(C$)
     Low
(C$)
     Average
Volume
 

For the monthly period(2):

                          

2013

                          

July

     20.09         18.97         529,014         58.19         53.74         325,391         59.79         56.03         651,430   

August

     20.30         19.32         265,723         59.72         54.64         341,882         61.52         57.39         733,076   

September

     20.42         19.22         662,745         58.34         54.74         246,340         60.18         57.54         637,900   

October

     21.11         18.91         564,978         61.46         56.77         165,848         64.18         58.67         604,907   

November

     21.30         20.27         1,325,825         60.51         57.93         256,775         63.48         61.11         618,502   

December

     22.86         20.79         658,729         59.48         57.06         224,105         63.25         60.63         712,595   

2014

                          

January

     24.13         22.03         781,114         58.47         51.19         271,424         62.05         57.20         712,893   

February

     26.45         24.01         857,963         54.75         50.67         412,437         60.50         56.11         793,408   

March

     27.52         25.78         930,438         56.83         53.41         256,681         62.80         59.00         960,807   

April

     26.74         24.94         655,495         56.67         54.20         214,419         62.38         59.43         666,997   

May

     26.28         24.92         456,438         55.30         53.76         199,257         60.40         58.35         945,953   

June

     27.18         25.39         382,948         55.68         53.88         128,367         59.97         57.76         651,283   

July

     27.34         26.05         376,536         56.32         54.38         136,200         61.24         57.89         540,560   

August

     32.40         26.05         3,355,605         82.16         54.23         2,065,714         92.73         59.47         2,852,360   

 

(1) Burger King Worldwide high and low sales prices per share information is based off of adjusted close amounts. Tim Hortons information is based on any point in time (unadjusted) consistent with methodologies used for quarterly information presented in each company’s 2013 10K.
(2) Assumes strict calendar months are used for both Burger King Worldwide and Tim Hortons.

 

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The table below sets forth, for the calendar quarters indicated, quarterly dividends paid per Tim Hortons common share, in Canadian dollars per share and in U.S. dollars per share (calculated using the Bank of Canada nominal noon exchange rate on the date Tim Hortons paid the applicable dividend). On [], the Tim Hortons record date, there were [] Tim Hortons common shares outstanding. Tim Hortons pays quarterly dividends with respect to its common shares.

 

     Date Paid      C$ Per Share      C$ / $ Exchange
Rate on Date
Paid (1)
     $ Per Share  

2012

           

Quarter ended April 4

     03/20/12       $ 0.21       $ 1.0067       $ 0.21   

Quarter ended July 4

     06/08/12       $ 0.21       $ 0.9679       $ 0.20   

Quarter ended September 30

     09/05/12       $ 0.21       $ 1.0099       $ 0.21   

Quarter ended December 30

     12/12/12       $ 0.21       $ 1.0148       $ 0.21   

2013

           

Quarter ended March 31

     03/19/13       $ 0.26       $ 0.9733       $ 0.25   

Quarter ended June 30

     06/07/13       $ 0.26       $ 0.9794       $ 0.25   

Quarter ended September 29

     09/04/13       $ 0.26       $ 0.9540       $ 0.25   

Quarter ended December 29

     12/10/13       $ 0.26       $ 0.9414       $ 0.24   

2014

           

Quarter ended March 30, 2014

     03/18/14       $ 0.32       $ 0.9020       $ 0.29   

Quarter ended June 30, 2014

     06/05/14       $ 0.32       $ 0.9146       $ 0.29   

Quarter ended September 28, 2014

     09/03/14       $ 0.32       $ 0.9197       $ 0.29   

Quarter ended December 28, 2014 (through [], 2014)

      $ []       $ []       $ []   

 

(1) Exchange rates are based on Bank of Canada nominal noon exchange rates.

On August 22, 2014, the last trading day before the public announcement of the negotiations between Burger King Worldwide and Tim Hortons, the closing sale price per Tim Hortons common share was $62.84 on the NYSE and C$68.78 on the TSX. On September 12, 2014, the latest practicable date before the date of this joint information statement/circular, the closing sale price per Tim Hortons common share was $79.67 on the NYSE and C$88.36 on the TSX.

Tim Hortons declares and pays dividends in Canadian dollars, eliminating the foreign exchange exposure for our shareholders ultimately receiving Canadian dollars. For U.S. beneficial shareholders, however, CDS Clearing and Depository Services Inc. (“CDS”) will convert, and for U.S. registered shareholders, Tim Hortons converts, the Canadian dividend amounts into U.S. dollars based on exchange rates prevailing at the time of conversion and pay such dividends in U.S. dollars. Shareholders ultimately receiving U.S. dollars are exposed to foreign exchange risk from the date the dividend is declared until the date CDS or Tim Hortons, as applicable, convert the dividend payment to U.S. dollars.

 

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The table below sets forth, for the calendar quarters indicated, quarterly dividends paid per share of Burger King Worldwide common stock. On [], there were [] shares of Burger King Worldwide common stock outstanding. Burger King Worldwide pays quarterly dividends with respect to its common stock.

 

     Date Paid      $ Per Share  

2012

     

Quarter ended December 31

     11/29/12       $ 0.04   

2013

     

Quarter ended March 31

     03/15/13       $ 0.05   

Quarter ended June 30

     05/15/13       $ 0.06   

Quarter ended September 30

     08/30/13       $ 0.06   

Quarter ended December 31

     11/26/13       $ 0.07   

2014

     

Quarter ended March 31, 2014

     03/12/14       $ 0.07   

Quarter ended June 30, 2014

     05/27/14       $ 0.07   

Quarter ended September 30, 2014

     08/26/14       $ 0.08   

Quarter ended December 31, 2014 (through [], 2014)

      $ []   

On August 22, 2014, the last trading day before the public announcement of the negotiations between Burger King Worldwide and Tim Hortons, the closing sale price per share of Burger King Worldwide common stock was $27.11 on the NYSE. On September 12, 2014, the latest practicable date before the date of this joint information statement/circular, the closing sale price per share of Burger King Worldwide common stock was $30.67 on the NYSE.

 

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THE TIM HORTONS SPECIAL MEETING OF SHAREHOLDERS

The Arrangement Resolution

The Tim Hortons shareholders are being asked to consider, and if thought fit, approve with or without variation, a special resolution to approve the arrangement under section 192 of the CBCA. The full text of the arrangement resolution is set forth in Annex K to this joint information statement/circular.

Required Vote

The arrangement resolution requires the affirmative vote of at least 66 23% of the votes cast on the arrangement resolution by the Tim Hortons shareholders present in person or represented by proxy at the Tim Hortons special meeting.

Board Recommendation

The Tim Hortons board of directors has unanimously approved the arrangement agreement and the transactions contemplated thereby, and has determined that the arrangement is fair, from a financial point of view, to the Tim Hortons shareholders and is in the best interests of Tim Hortons. See “The Transactions—Recommendation of Tim Hortons Board of Directors; Tim Hortons Reasons for the Arrangement”.

Who Can Vote

If you held Tim Hortons shares as of the close of business on the record date of [], 2014, you are entitled to receive notice of the Tim Hortons special meeting and vote your Tim Hortons common shares at the Tim Hortons special meeting. You can attend the Tim Hortons special meeting in person or vote by proxy. Each Tim Hortons common share that you own entitles you to one vote. Tim Hortons had [] Tim Hortons common shares issued and outstanding at the close of business on the Tim Hortons record date. Of this total, [] Tim Hortons common shares are entitled to vote at the Tim Hortons special meeting. The TDL RSU Employee Benefit Plan Trust holds the remaining [] Tim Hortons common shares and these shares are not entitled to be voted at the Tim Hortons special meeting.

As of the record date, Tim Hortons directors and executive officers and their affiliates beneficially owned a total of approximately [] Tim Hortons common shares, representing less than 1% of Tim Hortons outstanding Tim Hortons common shares as of that date. The table below under “Directors and Executives” sets out the holdings of Tim Hortons directors and executive officers in more detail.

Shareholders of Record

If your Tim Hortons common shares are registered directly in your name with Tim Hortons transfer agent, Computershare, you are considered a shareholder of record, or a registered shareholder, and Tim Hortons sent the proxy materials directly to you.

Beneficial Shareholders

If your Tim Hortons common shares are held in an account at a brokerage firm, bank or other intermediary, you are the beneficial owner of Tim Hortons common shares held in “street name”, or in the general account of your nominee. Tim Hortons does not send proxy materials directly to its beneficial shareholders, regardless of whether they are objecting beneficial owners (“OBOs”) or non-objecting beneficial owners (“NOBOs”). Intermediaries generally forward proxy materials to beneficial holders. They are accountable for complying with shareholder requests to receive materials for shareholder meetings and to vote their shares.

 

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Tim Hortons will have a list of Tim Hortons shareholders of record available at its Oakville office during regular business hours for review. If you are a beneficial shareholder of Tim Hortons and your Tim Hortons common shares are held in street name, your intermediary or its agent will appear on the list because it is the registered holder of your Tim Hortons shares.

Principal Shareholders

The table below lists Tim Hortons shareholders who, to the knowledge of Tim Hortons, beneficially own, control or direct, directly or indirectly, 5% or more of the issued and outstanding Tim Hortons common shares. This information is based solely on Tim Hortons review of public filings as of the Tim Hortons record date.

 

Share class

  

Name and address of

    beneficial holder    

   Amount and nature of
beneficial
ownership/control/direction
    Percent of class  

Common Shares

  

FMR LLC and a joint filer (1)

82 Devonshire Street

Boston, MA 02109

     7,487,603 (1)      5.48 %(2) 

 

(1) Based solely on the Schedule 13G/A filed with the SEC on February 14, 2014 by FMR LLC (“FMR”). Fidelity Management & Research Company (“Fidelity”), 245 Summer Street, Boston, Massachusetts 02210, a wholly owned subsidiary of FMR and an investment adviser registered under section 203 of the Investment Advisers Act of 1940, is the beneficial owner of 7,437,332 common shares as a result of acting as investment adviser to various investment companies (the “FMR funds”).

Edward C. Johnson 3rd and FMR, through its control of Fidelity and the funds, each has sole power to dispose of the 7,437,332 common shares owned by the funds. Mr. Johnson is Chairman of FMR. He and members of his family are the predominant owners, directly or through trusts, of 49% of the voting power of FMR and, as a result of a shareholders’ voting agreement, may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR.

Neither FMR nor Mr. Johnson has the sole power to vote or direct the voting of the shares owned directly by the funds, which power resides with the funds’ Boards of Trustees. Fidelity carries out the voting of the shares under written guidelines established by the funds’ Boards of Trustees.

Strategic Advisers, Inc., 245 Summer Street, Boston, MA 02210, a wholly owned subsidiary of FMR and an investment adviser registered under section 203 of the Investment Advisers Act of 1940, provides investment advisory services to individuals. As such, FMR’s beneficial ownership includes 1,171 common shares beneficially owned through Strategic Advisers, Inc.

Pyramis Global Advisors, LLC (“Pyramis”), 900 Salem Street, Smithfield, Rhode Island, 02917, an indirect wholly owned subsidiary of FMR and an investment adviser registered under section 203 of the Investment Advisers Act of 1940, is the beneficial owner of 41,500 common shares as a result of its serving as investment adviser to institutional accounts, non-U.S. mutual funds, or investment companies registered under section 8 of the Investment Company Act of 1940 owning such shares. Mr. Johnson and FMR, through its control of Pyramis, each has sole power to dispose of over 41,500 common shares and sole power to vote or to direct the voting of 41,500 common shares owned by the institutional accounts or funds advised by Pyramis.

Pyramis Global Advisors Trust Company (“Pyramis Global Advisors Trust”), 900 Salem Street, Smithfield, Rhode Island, 02917, an indirect wholly owned subsidiary of FMR and a bank as defined in section 3(a)(6) of the Exchange Act, is the beneficial owner of 7,600 common shares as a result of its serving as investment manager of institutional accounts owning these shares. Mr. Johnson and FMR, through its control of Pyramis Global Advisors Trust, each has sole power to dispose of 7,600 common shares and to vote or direct the voting of 0 common shares owned by the institutional accounts managed by Pyramis Global Advisors Trust.

 

(2) Based on [•] common shares outstanding as of the record date (including the [•] common shares held by The TDL RSU Employee Benefit Plan Trust).

 

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Delivery of Materials

These proxy materials have been sent to you, as a Tim Hortons shareholder, by mail, or electronically if you requested it. Tim Hortons pays the costs of soliciting proxies from its registered and beneficial shareholders, including the costs of:

 

    forwarding printed proxy materials by mail to Tim Hortons shareholders (including NOBOs and OBOs), and

 

    obtaining Tim Hortons beneficial owners’ voting instructions from their intermediaries.

If you use the internet to vote or access proxy materials electronically, you may incur usage charges and other costs from internet access providers or telephone companies.

How to Vote

You can vote by proxy, or you can attend the Tim Hortons special meeting and vote your Tim Hortons common shares in person. The voting process is different for registered and beneficial shareholders of Tim Hortons. See below under “Registered Shareholders of Tim Hortons” and “Beneficial Shareholders of Tim Hortons ”, respectively.

Voting by Proxy

Voting by proxy is the easiest way to vote, and Tim Hortons shareholders can do it by phone, mail or on the internet. Voting by proxy means that you, as a Tim Hortons shareholder, are giving someone else (i.e., your proxyholder) the authority to attend the Tim Hortons special meeting and vote your Tim Hortons common shares for you.

You, as a Tim Hortons shareholder, can appoint anyone to be your proxyholder and this person does not need to be a Tim Hortons shareholder. Your votes will only be counted if your proxyholder attends the Tim Hortons special meeting and votes your Tim Hortons shares for you. Simply follow the instructions on the proxy form, and print the name of the person you would like to appoint as proxyholder in the space provided. If you vote by proxy but do not specify a proxyholder, the representatives of Tim Hortons appointed by Tim Hortons board of directors will act as your proxyholder.

Proxyholders must vote Tim Hortons shares according to the instructions given to them by Tim Hortons shareholders. If you, as a Tim Hortons shareholder, do not specify your voting instructions, your proxyholder can vote as he/she see fit. If you do not specify your voting instructions and you have appointed Tim Hortons representatives to act as your proxyholder, they will vote for approving the Arrangement Resolution.

Proxyholders have the authority to vote as he/she see fit with respect to any other matters that properly come before the Tim Hortons special meeting and with respect to any amendments to the matters identified in the notice of meeting or any adjournment or postponement thereof, whether or not the amendment or other matter that comes before the Tim Hortons special meeting is or is not routine and whether or not the amendment or other matter that comes before the Tim Hortons special meeting is contested. As of the date of this joint information statement/circular, Tim Hortons is not aware of any items to be brought before the Tim Hortons special meeting that are not described in this joint information statement/circular.

Tim Hortons shareholders can revoke their previous voting instructions by submitting new voting instructions by phone or on the internet or by sending a new proxy form or voting instruction form with a later date. If you, as a Tim Hortons shareholder, want to submit your new vote by phone or on the internet, sign in to authenticate yourself in the manner set out below and then follow the instructions. The written notice of revocation may be executed by the registered shareholder or by an attorney who provides your written authorization. If the shareholder is a corporation, the written notice must be executed by its duly authorized officer or attorney.

 

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Registered Shareholders of Tim Hortons

If you are a registered shareholder of Tim Hortons, your package includes the notice of meeting, this joint information statement/circular and a proxy form to vote your Tim Hortons shares.

Four ways for registered shareholders of Tim Hortons to vote

 

    By phone—Call toll free (866) 732-VOTE (8683) from a touchtone phone and follow the instructions

 

    On the internet—Go to www.investorvote.com and follow the instructions on the screen

 

    By mail—Complete the proxy form, sign and date it, and mail it in the postage-paid envelope provided

 

    In person—Check in with a Computershare representative when you arrive at the Tim Hortons special meeting and be sure to bring government-issued picture identification

If you vote by phone or on the internet, you can do it any time of the day, seven days a week. You will need your control number, which appears at the bottom of your proxy form. You must vote by mail or on the internet if you want to appoint someone other than Tim Hortons representatives (or yourself) as your proxyholder. If you are voting on behalf of a corporation or another person, you must vote by mail.

In order to effectively change your vote as a registered shareholder of Tim Hortons, Computershare must receive your new voting instructions before midnight (Toronto time) on [], 2014 (the second business day before the Tim Hortons special meeting), or if the Tim Hortons special meeting is postponed or adjourned, before midnight (Toronto time) on the business day before the Tim Hortons special meeting is reconvened. In addition, you can attend the Tim Hortons special meeting in person and cast a different vote if you specifically request the opportunity to do so at the Tim Hortons special meeting. Attendance at the Tim Hortons special meeting will not automatically revoke voting instructions given prior to the Tim Hortons special meeting.

Also, you can revoke your previous voting instructions without submitting new voting instructions at any time prior to the final vote at the Tim Hortons special meeting by delivering a written notice to the chairman of the Tim Hortons special meeting prior to the vote on the matter or by any other method permitted by law.

Beneficial Shareholders of Tim Hortons

If you are a beneficial shareholder of Tim Hortons, your package provided by your intermediary should include the notice of meeting, this joint information statement/circular, and a voting instruction form for you to provide your voting instructions to your intermediary, who will carry out your instructions and vote on your behalf, or withhold your votes if you have so indicated on your form.

Four ways for beneficial shareholders of Tim Hortons to vote

 

    By phone—Follow the instructions on the voting instruction form provided by your intermediary

 

    On the internet—Go to www.proxyvote.com and follow the instructions on the screen

 

    By mail—Complete the voting instruction form, sign and date it, and mail it in the return envelope provided as soon as possible, so your intermediary receives the form in time to carry out your instructions

 

    In person—The voting instruction form provided by your intermediary will provide instructions on how you may vote in person at the Tim Hortons special meeting. The following is a general summary of the most common alternatives provided by intermediaries:

 

   

The instructions provided by your intermediary may permit you to vote in person at the Tim Hortons special meeting by appointing yourself as proxyholder for your Tim Hortons shares by

 

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printing your own name in the space provided, signing the form and NOT indicating your voting instructions. If you do so, send the form to your intermediary as soon as possible to give your intermediary enough time to act on your instructions. Computershare must receive instructions through your intermediary before midnight (Toronto time) on [], 2014 (the second business day before the Tim Hortons special meeting), or if the Tim Hortons special meeting is postponed or adjourned, before midnight (Toronto time) on the business day before the Tim Hortons special meeting is reconvened.

 

    Alternatively, the instructions provided by your intermediary may state that in order to vote in person at the Tim Hortons special meeting, you must indicate on the voting instruction form that you want to receive a proxy form, sign and date it, and send the completed voting instruction form to your intermediary as soon as possible. You should then receive a proxy form from your intermediary, which you will need to complete, appointing yourself as proxyholder. Sign and date the proxy form and send it as soon as possible to Computershare in the envelope provided. Computershare must receive the properly completed proxy form by midnight (Toronto time) on [], 2014 (the second business day before the Tim Hortons special meeting), or if the Tim Hortons special meeting is postponed or adjourned, before midnight (Toronto time) on the business day before the Tim Hortons special meeting is reconvened.

In either case, be sure to check in with a Computershare representative when you arrive at the Tim Hortons special meeting. Unless prohibited by law, the person named as proxyholder in the proxy form or voting instruction form will have full discretionary authority to vote on all matters at the Tim Hortons special meeting, including new items that are not set out in this joint information statement/circular, if Computershare receives the properly completed form by midnight (Toronto time) on [], 2014 (the second business day before the Tim Hortons special meeting), or if the Tim Hortons special meeting is postponed or adjourned, before midnight (Toronto time) on the business day before the Tim Hortons special meeting is reconvened.

Canadian securities laws require brokers and other intermediaries to seek voting instructions from beneficial shareholders in advance of shareholder meetings. The various brokers and other intermediaries have their own mailing procedures and provide their own return instructions to clients, which should be carefully followed by beneficial shareholders in order to ensure that their Tim Hortons common shares are voted at the Tim Hortons special meeting. The voting instruction form supplied to a beneficial shareholder by its broker (or the agent of the broker) is substantially similar to the instrument of proxy provided directly to registered shareholders by Tim Hortons. However, its purpose is limited to instructing the registered shareholder (i.e., the intermediary or agent of the intermediary). A beneficial shareholder who receives a voting instruction form from its broker or other intermediary cannot use that form to vote Tim Hortons common shares directly at the Tim Hortons special meeting. The voting instruction form must be returned to your broker or other intermediary (or instructions respecting the voting of Tim Hortons common shares must otherwise be communicated to your broker or other intermediary) well in advance of the Tim Hortons special meeting in order to have the Tim Hortons common shares voted. If you have any questions respecting the voting of Tim Hortons common shares held through a broker or other intermediary, please contact that broker or other intermediary for assistance.

In order to effectively change your vote as a beneficial shareholder of Tim Hortons, Computershare must receive your new voting instructions before midnight (Toronto time) on [], 2014 (the second business day before the Tim Hortons special meeting), or if the Tim Hortons special meeting is postponed or adjourned, before midnight (Toronto time) on the business day before the Tim Hortons special meeting is reconvened. Be sure to allow enough time for your intermediary to receive your new instructions and act on them prior to that deadline.

You must contact your intermediary in order to revoke your previous voting instructions without submitting new voting instructions. You will need to allow for enough time for your intermediary to receive your new instructions and act on them prior to the vote on the matter.

 

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About Abstentions

When you, as a Tim Hortons shareholder, cast your vote, you want it to count. Be sure to carefully follow the voting instructions provided. If you are a Tim Hortons shareholder of record and do not complete a proxy form, or properly submit it, no votes will be cast on your behalf.

If you are a beneficial shareholder of Tim Hortons and your intermediary (a) does not have discretionary authority to vote your Tim Hortons shares on a particular matter and has not received instructions from you on how to vote, or (b) does have discretionary authority but has not received proper instructions from you and cannot vote your Tim Hortons shares as a result, then your votes will not be cast. In such cases, the intermediary simply declines to vote your Tim Hortons shares. As a result of restrictions under the CBCA and rules governing members of the NYSE, your intermediary cannot vote your Tim Hortons shares on a discretionary basis if you do not provide proper voting instructions, so it is very important to provide clear and proper instructions.

Abstentions are only counted for determining whether or not Tim Hortons has a quorum. Abstentions and are not counted towards shareholder votes on any matter described in this joint information statement/circular.

Confidentiality

Tim Hortons transfer agent protects the privacy of voting instructions, ballots and voting tabulations. Votes of Tim Hortons shareholders will only be disclosed to Tim Hortons, or a third party, if it is:

 

    required by law,

 

    necessary for tabulating and certifying the votes, or

 

    needed to facilitate a successful proxy solicitation.

Tim Hortons shareholders may provide written comments on their proxy form, and these will be forwarded to management and/or the board of directors of Tim Hortons, as appropriate.

 

Voting results

The preliminary voting results will be announced at the Tim Hortons special meeting.

The scrutineer will tally the final voting results and report them to Tim Hortons after the Tim Hortons special

meeting. Tim Hortons will report the final results promptly after they become available, in a current report on

Form 8-K, available online at www.sec.gov and www.sedar.com.

 

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BENEFICIAL STOCK OWNERSHIP OF TIM HORTONS SHAREHOLDERS

Voting Securities and their Principal Holders

The table below lists the shareholders who Tim Hortons knows to beneficially own 5% or more of Tim Hortons issued and outstanding common shares. This information is based solely on Tim Hortons review of public filings as of September 15, 2014.

 

Share class

  

Name and address of beneficial holder

   Amount and nature of beneficial
ownership/control/direction
    Percent of class  

Common Shares

  

FMR LLC and a joint filer (1)

82 Devonshire Street

Boston, MA 02109

     7,487,603  (1)      5.48 % (2) 

 

(1) Based solely on the Schedule 13G/A filed with the SEC on February 14, 2014 by FMR. Fidelity, 245 Summer Street, Boston, Massachusetts 02210, a wholly owned subsidiary of FMR and an investment adviser registered under section 203 of the Investment Advisers Act of 1940, is the beneficial owner of 7,437,332 Tim Hortons common shares as a result of acting as investment adviser to the FMR funds.

Edward C. Johnson 3rd and FMR, through its control of Fidelity, and the funds each has sole power to dispose of the 7,437,332 Tim Hortons common shares owned by the FMR funds. Mr. Johnson is Chairman of FMR. He and members of his family are the predominant owners, directly or through trusts, of 49% of the voting power of FMR and, as a result of a shareholders’ voting agreement, may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR.

Neither FMR nor Mr. Johnson has the sole power to vote or direct the voting of the shares owned directly by the FMR funds, which power resides with the FMR funds’ Boards of Trustees. Fidelity carries out the voting of the shares under written guidelines established by the funds’ Boards of Trustees.

Strategic Advisers, Inc., 245 Summer Street, Boston, MA 02210, a wholly owned subsidiary of FMR and an investment adviser registered under section 203 of the Investment Advisers Act of 1940, provides investment advisory services to individuals. As such, FMR’s beneficial ownership includes 1,171 Tim Hortons common shares beneficially owned through Strategic Advisers, Inc.

Pyramis 900 Salem Street, Smithfield, Rhode Island, 02917, an indirect wholly owned subsidiary of FMR and an investment adviser registered under section 203 of the Investment Advisers Act of 1940, is the beneficial owner of 41,500 Tim Hortons common shares as a result of its serving as investment adviser to institutional accounts, non-U.S. mutual funds, or investment companies registered under section 8 of the Investment Company Act of 1940 owning such shares. Mr. Johnson and FMR, through its control of Pyramis, each has sole power to dispose of over 41,500 common shares and sole power to vote or to direct the voting of 41,500 Tim Hortons common shares owned by the institutional accounts or funds advised by Pyramis.

Pyramis Global Advisors Trust Company, which we refer to as Pyramis Global Advisors Trust, 900 Salem Street, Smithfield, Rhode Island, 02917, an indirect wholly owned subsidiary of FMR and a bank as defined in section 3(a)(6) of the Exchange Act, is the beneficial owner of 7,600 Tim Hortons common shares as a result of its serving as investment manager of institutional accounts owning these shares. Mr. Johnson and FMR, through its control of Pyramis Global Advisors Trust, each has sole power to dispose of 7,600 common shares and to vote or direct the voting of 0 common shares owned by the institutional accounts managed by Pyramis Global Advisors Trust.

 

(2) Based on [•] Tim Hortons common shares outstanding as of the record date (including the [] Tim Hortons common shares held by The TDL RSU Employee Benefit Plan Trust).

 

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Security Ownership of Management/Directors

The table below sets forth information on the Tim Hortons common shares beneficially owned by each of Tim Hortons directors, by Tim Hortons named executives and by Tim Hortons directors and executive officers as a group. Individually and collectively, they own less than 1% of Tim Hortons outstanding common shares. The percentage of ownership is calculated based on [] Tim Hortons common shares outstanding as of [], 2014 (including the [] Tim Hortons common shares held by The TDL RSU Employee Benefit Plan Trust). Unless we note otherwise, each of the following people and their family members has sole voting and investment power with respect to the common shares beneficially owned by him or her.

For the purpose of this table, the term “executive officer” has the same meaning as under Rule 405 promulgated under the Securities Act and under NI 51-102. The information about beneficial ownership is based on data provided by each director, nominee or executive officer, and is included in insider reports that are publicly available on the System for Electronic Disclosure by Insiders.

 

Share class

  

Name of beneficial holder

   Common shares currently
held (1)
    Common shares
outstanding that
can be acquired
within 60 days (2)
     Total beneficial
ownership
     Percent of
class
 

Common shares

   Paul D. House      134,219        —           134,219         *   
   M. Shan Atkins      1,000        —           1,000         *   
   Sherri A. Brillon      —          —           —           *   
   Marc Caira      —          —           —           *   
   Michael J. Endres      52,884  (3)      —           52,884         *   
   Moya M. Greene      —          —           —           *   
   The Hon. Frank Iacobucci      6,663        —           6,663         *   
   John A. Lederer      15,120        —           15,120         *   
   David H. Lees      6,680        —           6,680         *   
   Thomas V. Milroy      —          —           —           *   
   Christopher R. O’Neill      —          —           —           *   
   Wayne C. Sales      12,067        —           12,067         *   
   Cynthia J. Devine      92,374        —           92,374         *   
   David F. Clanachan      57,789        —           57,789         *   
   Peter J. Nowlan      —          —           —           *   
   Roland M. Walton      73,389        —           73,389         *   
   Stephen E. Wuthmann      1,453        —           1,453         *   
   Jill E. Sutton      1,608        —           1,608         *   
   Michel Meilleur      6,360        —           6,360         *   
   Scott Bonikowsky      1,701        —           1,701         *   
   All directors and executive officers as a group (20 persons)      463,307        —           463,307         *   

 

* Represents beneficial ownership of less than 1% of Tim Hortons outstanding common shares.
(1) Includes Tim Hortons common shares owned directly or indirectly. See “Ownership of Deferred Stock Units by Directors”, below for the number of deferred stock units owned by each director as of the record date, which are not included in the table above.

 

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(2) See Incentive Plan Awards on page 4 of, and notes 2 and 3 to the summary compensation table on page 37 of, Tim Hortons Annual Report on Form 10-K/A, filed with the SEC on March 21, 2014, and incorporated by reference into this joint information statement/ circular, for more information about the outstanding restricted share units and options with tandem SARs held by the named executives.
(3) Includes 49,000 Tim Hortons common shares held in two trusts where Mr. Endres has voting and investment power.

Ownership of Deferred Stock Units by Directors

The table below shows the deferred stock units held by Tim Hortons directors as of September 3, 2014. These deferred stock units are not included in the number of Tim Hortons common shares beneficially owned by directors in the above table.

Deferred stock units vest immediately and are paid out in cash when a director retires from the Tim Hortons board of directors.

 

Director

   DSUs (#)  

Paul D. House (1)

     1,821   

M. Shan Atkins

     12,104   

Sherri A. Brillon (2)

     2,008   

Marc Caira (3)

     0   

Michael J. Endres

     21,595   

Moya M. Greene

     15,863   

The Hon. Frank Iacobucci

     29,684   

John A. Lederer

     24,133   

David H. Lees

     24,013   

Thomas V. Milroy (2)

     2,008   

Christopher R. O’Neill (4)

     1,034   

Wayne C. Sales

     24,410   

 

(1) Mr. House had not been eligible to receive director compensation, including deferred stock units, until 2014, because he served as President and Chief Executive Officer until July 2, 2013, and provided transition services until December 31, 2013.
(2) Ms. Brillon and Mr. Milroy were appointed to the Tim Hortons board of directors on August 8, 2013.
(3) Mr. Caira, as current President and Chief Executive Officer, is not eligible to receive director compensation, including deferred stock units.
(4) Mr. O’Neill was appointed to the Tim Hortons board of directors on March 11, 2014.

 

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BENEFICIAL STOCK OWNERSHIP INFORMATION OF BURGER KING WORLDWIDE STOCKHOLDERS

Security Ownership of Certain Beneficial Owners, Directors and Management

This table shows ownership information for Burger King Worldwide stockholders known by its management to be the owners of 5% or more of our common stock, each of its directors, each of the named executive officers and all directors and executive officers as a group. This information is presented as of March 18, 2014. The percentage ownership is based upon 351,935,504 shares of common stock outstanding as of March 18, 2014.

Under SEC rules, “beneficial ownership” for purposes of this table takes into account stock as to which the individual has or shares voting and/or investment power as well as shares that may be acquired within 60 days (such as by exercising vested stock options) and is different from beneficial ownership for purposes of Section 16 of the Exchange Act. Except as indicated in the footnotes to this table, to the best of Burger King Worldwide’s knowledge, the persons and entities named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them.

Shares of Common Stock Beneficially Owned

 

Name of Beneficial Owner

   Number of
Shares
     Percent of
Class
 

5% Stockholders:

     

3G (1)

     243,858,915         69.3   

Pershing Square Funds (2)

     41,949,413         11.9   

Named Executive Officers and Directors:

     

Alexandre Behring (3)

     89,218         *   

Martin E. Franklin (4)

     1,416,746         *   

Paul J. Fribourg (3)

     43,258         *   

Bernardo Hees

     266,060         *   

Alan Parker (5)

     53,625         *   

Carlos Alberto Sicupira (3)

     44,608         *   

Roberto Moses Thompson Motta (3)

     2,175         *   

Alexandre Van Damme (3)

     11,175         *   

Daniel S. Schwartz

     137,996         *   

Joshua Kobza

     5,413         *   

José E. Cil

     105,758         *   

Heitor Goncalves

     107,478         *   

All executive officers and directors as a group (16 persons) (7)

     2,389,805         *   

 

* Represents beneficial ownership of less than one percent (1%) of Burger King Worldwide’s outstanding common stock.
(1)

3G Special Situations Partners, Ltd. serves as the general partner of 3G Special Situations Fund II, L.P. 3G Capital Partners II L.P. is the parent of, and wholly owns, 3G Special Situations Partners, Ltd. 3G Capital serves as the general partner of 3G Capital Partners II L.P. Each of 3G Special Situations Fund II, L.P., 3G Special Situations Partners, Ltd., 3G Capital Partners II L.P. and 3G Capital may be deemed to beneficially own, and to have shared voting and dispositive power with respect to, these shares of Common Stock. The address of each of the 3G entities is c/o 3G Capital, Inc., 600 Third Avenue, 37th Floor, New York, New York 10016. Mr. Behring is the managing partner of 3G Capital, and Messrs. Behring, Hees, Schwartz, Sicupira and Thompson Motta are partners of 3G Capital. A five member investment committee of 3G Capital is empowered to make decisions with respect to 3G Capital’s investments, including Burger King

 

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  Worldwide, and therefore, no individual member of the committee is deemed to be the beneficial owner of the shares of Burger King Worldwide beneficially owned indirectly by 3G Capital. This investment committee has the power to vote, dispose of or sell all of the shares of Burger King Worldwide. Messrs. Behring, Sicupira and Thompson Motta are among the members of the investment committee and disclaim beneficial ownership of any shares beneficially owned by 3G Capital.
(2) According to a Schedule 13G (Amendment No. 2) filed by Pershing Square Capital Management, L.P., Pershing Square Capital Management, L.P. is the investment manager of Pershing Square, L.P., Pershing Square II, L.P., Pershing Square Holdings, Ltd. and Pershing Square International, Ltd. (collectively referred to as the “Pershing Square Funds”). Pershing Square GP, LLC is the general partner of Pershing Square, L.P. and Pershing Square II, L.P. PS Management GP, LLC is the general partner of Pershing Square Capital Management, L.P. William Ackman is the Chief Executive Officer of Pershing Square Capital Management, L.P. and the managing member of PS Management GP, LLC. The address of each of the Pershing Square Funds, Pershing Square Capital Management, L.P., PS Management GP, LLC and Mr. Ackman is 888 Seventh Avenue, 42nd Floor, New York, New York 10019. Pershing Square Capital Management, L.P., as the investment adviser to the Pershing Square Funds, may be deemed to have the shared power to vote or direct the vote of (and the shared power to dispose or direct the disposition of) 38,387,865 shares of Common Stock. As the general partner of Pershing Square Capital Management, L.P., PS Management GP, LLC may be deemed to have the shared power to vote or to direct the vote of (and the shared power to dispose of or direct the disposition of) these shares of Common Stock. By virtue of Mr. Ackman’s position as managing member of PS Management GP, LLC, Mr. Ackman may be deemed to have the shared power to vote or direct the vote of (and the shared power to dispose or direct the disposition of) these shares of Common Stock and, therefore, Mr. Ackman may be deemed to be the beneficial owner of these shares of Common Stock. In addition, Mr. Ackman has sole power to vote or direct the vote of 3,561,548 shares of Common Stock.
(3) Represents restricted stock units that settle upon termination of board service by Messrs. Behring, Fribourg, Sicupira, Thompson or Van Damme.
(4) Represents 1,411,469 shares of common stock owned directly and 5,277 restricted stock units that settle upon termination of board service by Mr. Franklin.
(5) Includes 8,625 restricted stock units that settle upon termination of board service, 30,000 shares held by Oyster Reach Limited and 15,000 owned directly by Mr. Parker. Mr. Parker is the sole shareholder and director of Oyster Reach Limited.
(6) Based on Burger King Worldwide’s records of the stock ownership for Mr. Wiborg and Ms. Faugeres.
(7) Includes in the aggregate 204,336 restricted stock units that settle upon the termination of board service by respective board members.

Excludes the shares owned by Mr. Wiborg and Ms. Faugeres since they are no longer employed by Burger King Worldwide.

Section 16(a) beneficial ownership reporting compliance

Section 16(a) of the Exchange Act requires Burger King Worldwide’s directors, executive officers and persons who own more than 10% of the outstanding shares of Burger King Worldwide’s common stock to file with the SEC reports of their ownership and changes in their ownership of Burger King Worldwide’s common stock. Directors, executive officers and greater-than-ten percent stockholders are also required to furnish Burger King Worldwidewith copies of all ownership reports they file with the SEC. To Burger King Worldwide’s knowledge, based solely on a review of the copies of such reports furnished to us and representations that no other reports were required, all of Burger King Worldwide’s directors and executive officers complied with all Section 16(a) filing requirements during 2013.

 

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THE TRANSACTIONS

Effect of the Transactions

Burger King Worldwide agreed to acquire Tim Hortons pursuant to the arrangement agreement in a transaction that will result in Burger King Worldwide and Tim Hortons being indirect subsidiaries of Holdings and Partnership. The transactions will be effectuated in two primary steps. In the first step, Amalgamation Sub will acquire Tim Hortons pursuant to a plan of arrangement under Canadian law, which will result in Tim Hortons becoming an indirect subsidiary of both Holdings and Partnership. In the second step, Merger Sub will merge with and into Burger King Worldwide, with Burger King Worldwide as the surviving corporation in the merger, which will result in Burger King Worldwide becoming an indirect subsidiary of both Holdings and Partnership. Holdings, which will be renamed and will become a corporation organized under the laws of Canada, will be the general partner of Partnership and own a majority interest (by vote and value) in Partnership which will be represented by common units and preferred units of Partnership which will entitle Holdings to distributions from Partnership that generally correspond to dividends and distributions that are paid by Holdings in respect of common shares and preferred shares of Holdings that are issued and outstanding from time to time. The balance of the partnership units of Partnership will initially be held by former holders of Burger King Worldwide common stock in the form of newly issued Partnership exchangeable units.

The arrangement agreement and the plan of arrangement are attached as Annex A and Annex B, respectively, to this information statement/circular. We encourage you to read these documents in their entirety; they are the principal documents governing the transactions and the other related transactions.

If the arrangement is completed, each holder of a common share of Tim Hortons will be entitled to receive C$65.50 in cash and 0.8025 newly issued Holdings common shares in exchange for each common share of Tim Hortons held by such shareholder, other than shareholders who:

 

    make an election to receive cash, who will be entitled to receive C$88.50 in cash in exchange for each common share of the Tim Hortons held by such shareholder; or

 

    make an election to receive Holdings common shares, who will be entitled to receive 3.0879 newly issued Holdings common shares in exchange for each share of Tim Hortons held by such shareholder.

Any cash election or shares election is subject to adjustment in accordance with the plan of arrangement, as described in “Arrangement Agreement—Arrangement Consideration to Tim Hortons shareholders”.

If the merger is completed, each share of Burger King Worldwide common stock outstanding immediately prior to the effective time of the merger will be converted into the right to receive (a) if no exchangeable election (as described below) has been made, 0.99 newly issued Holdings common shares and 0.01 newly issued Partnership exchangeable units or (b) if the stockholder makes an election to receive consideration solely in the form of exchangeable units of Partnership, one exchangeable unit of Partnership in exchange for each share of Burger King Worldwide common stock, in each case subject to proration as set forth in the arrangement agreement, as described in “The Transactions—Election and Proration Procedures; Exchange of Shares of Burger King Worldwide Common Stock”.

Based on the number of Burger King Worldwide and Tim Hortons common shares estimated to be outstanding immediately prior to the closing of the transactions, we estimate that, upon the closing, former Tim Hortons shareholders will own approximately 22% of the common equity of the combined company through ownership of Holdings common shares and former Burger King Worldwide stockholders will own approximately 76% of the combined company through ownership of both Holdings common shares and Partnership exchangeable units, in each case, on a fully exchanged and fully-diluted basis. In connection with the transactions, Berkshire will purchase preferred shares of Holdings and a warrant to purchase common shares, which common shares will represent 1.75% of the fully exchanged and fully-diluted Holdings common shares.

 

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For additional information on the consideration to be received in the transactions, see “The Arrangement Agreement—Merger Consideration to Burger King Worldwide Stockholders” and “The Transactions—The Arrangement Agreement—Arrangement Consideration to Tim Hortons Shareholders.

Under the arrangement, equity awards previously granted by Tim Hortons will be treated as follows:

Tim Hortons Stock Options. Pursuant to the effective time of the arrangement, each outstanding vested Tim Hortons stock option for which a Tim Hortons optionholder has executed a surrender form (a “surrendered Tim Hortons stock option”) will be surrendered and transferred to Tim Hortons in consideration for the issuance of the number of Tim Hortons common shares, rounded down to the nearest whole share, equal in value to the in-the-money value of such surrendered Tim Hortons stock option. The in-the-money value of the Tim Hortons stock option is the amount by which the fair market value of a Tim Hortons common share exceeds the exercise price of the Tim Hortons stock option. The surrendered Tim Hortons stock options will be terminated at the time of their surrender and Tim Hortons common shares issued in respect of such surrendered stock options will be treated as described below.

Pursuant to the Arrangement, each outstanding Tim Hortons stock option (and its tandem stock appreciation right), whether vested or unvested, that is not a surrendered Tim Hortons stock option will be exchanged for a stock option (with a tandem stock appreciation right) to acquire from Holdings a number of Holdings common shares equal to the product of: (a) the number of Tim Hortons common shares subject to such Tim Hortons stock option multiplied by (b) the exchange ratio of 3.0879 (and rounded down to the nearest whole number of Holdings common shares). The exercise price per Holdings common share of such Holdings stock option shall be equal to the quotient of: (a) the exercise price per Tim Hortons common share subject to the exchanged Tim Hortons stock option divided by (b) the exchange ratio of 3.0879 (with the aggregate exercise price being rounded up to the nearest whole cent), provided that the in-the-money value of such Holdings stock options immediately after the issuance of such Holdings stock options may not exceed the in-the-money value of the Tim Hortons stock options immediately prior to such issuance. Subject to the foregoing, each Holdings stock option will have the same terms and conditions as were applicable to the exchanged Tim Hortons stock option.

Restricted Stock Units and Performance Stock Units. Pursuant to the arrangement, all outstanding Tim Hortons restricted stock units and performance stock units will vest, with the number of performance stock units vesting determined based on the maximum or highest level achievable, and Tim Hortons common shares will be issued in full settlement of such awards on the basis of one Tim Hortons common share for each restricted stock unit or performance stock unit.

Tim Hortons common shares issued in consideration for surrendered Tim Hortons stock options or in settlement of restricted stock unit awards and performance stock unit awards will be transferred to Amalgamation Sub pursuant to the arrangement and the holders of such Tim Hortons common shares will be entitled to make an election in respect of the arrangement consideration to be received in consideration for such transfer.

Deferred Stock Units. At the effective time of the arrangement, all outstanding Tim Hortons deferred stock units will vest and Tim Hortons will pay holders of Tim Hortons deferred stock units an amount in cash for each Tim Hortons deferred stock unit equal to C$65.50 plus the value of 0.8025 newly issued common shares of Holdings (with the value determined based on the opening price of a common share of Holdings on the NYSE on the first trading day following the effective time of the arrangement).

At the effective time of the merger, each outstanding Burger King Worldwide option will be converted into the right to receive, on the same terms and conditions as were applicable under the award agreements issued in connection with such Burger King Worldwide option (including with respect to vesting and exercise price), an option to acquire common shares from Holdings in respect of the same number of Holdings common shares as

 

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were subject to the underlying Burger King Worldwide option. At the effective time of the merger, each outstanding restricted stock unit will be converted into the right to receive, on the same terms and conditions as were applicable under such Burger King Worldwide restricted stock unit (including with respect to vesting), a restricted stock unit with respect to the same number of Holdings common shares as were subject to the underlying Burger King Worldwide restricted stock unit.

The following diagrams are a simplified illustration of the structure of Tim Hortons and Burger King Worldwide before and following the completion of the transactions.

Simplified structure before the completion of the transactions

 

LOGO

Simplified structure following completion of the transactions

 

LOGO

 

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Background of the Transaction

The senior management teams and boards of directors of each of Burger King Worldwide and Tim Hortons actively monitor and assess developments in the quick service restaurant industry and are generally aware of the business activities of other major quick service restaurant companies, including each other. As a result, executives from each of Burger King Worldwide and Tim Hortons are generally familiar with the other company’s business and operations.

In addition, the senior management teams and boards of directors of each of Burger King Worldwide and Tim Hortons regularly consider and evaluate options for achieving their company’s long-term strategic goals and enhancing shareholder value. These options have included periodic assessments of potential business combinations with other quick service restaurant companies.

Both companies also have been parties to significant business combination and other transactions in the past. In particular, in March 2006, Tim Hortons completed its initial public offering of Tim Hortons common shares, which began trading on the New York Stock Exchange and the Toronto Stock Exchange, and later in 2006 The Wendy’s Company completed the spin-off of the remainder of its interests in Tim Hortons to the stockholders of The Wendy’s Company. With respect to Burger King Worldwide and its predecessors, a predecessor to Burger King Worldwide was acquired by private equity funds controlled by TPG Capital, Bain Capital Partners and the Goldman Sachs funds in 2002, and in May 2006 it completed its initial public offering of common stock, which began trading on the New York Stock Exchange. On October 19, 2010, the predecessor to Burger King Worldwide was acquired by 3G, and as a result of the acquisition, its common stock ceased to be traded on the New York Stock Exchange after close of market on that day. On June 20, 2012, the predecessor to Burger King Worldwide merged with a subsidiary of Justice Holdings Limited, and shares of Burger King Worldwide common stock began trading on the New York Stock Exchange.

In early 2013, the Burger King Worldwide board of directors and senior management determined to consider mergers or other business combination transactions involving Burger King Worldwide in connection with its 5-year strategic plan process. Following approval by the board of directors of the strategic plan, in the second half of 2013, the senior management of Burger King Worldwide began to actively review potential business transactions involving Burger King Worldwide and determined to explore a potential transaction with Tim Hortons. In particular, they believed that a potential transaction could bring two fully-franchised quick service restaurant businesses with strong brands under one majority owner that would result in potential for further growth in strategic markets in a manner that could create value for the sha