Fat Brands updates warrant holders in connection with Twin Hospitality spinoff

As previously noted, Fat Brands (FAT) announced a partial spin-off of its subsidiary, Twin Hospitality Group, in the form of a special stock dividend to Fat Brands’ common stockholders. As announced, the dividend will consist of 0.1520207 shares of Class A Common Stock of Twin Hospitality for each one share of Fat Brands Class A Common Stock and Class B Common Stock outstanding as of the close of trading on January 27. The company issued the following update: “Holders of Fat Brands’ outstanding Warrants (FATBW) who wish to receive the distribution of Twin Common Stock must exercise their Warrants for Fat Brands Class A Common Stock in advance of the record date. Warrants that are not exercised prior to the record date will not receive the distribution of Twin Common Stock, but instead will have their exercise price adjusted downward. The current exercise price of the Warrants is $2.2142, which will be adjusted downward immediately following the record date by an amount equal to the fair market value of the Twin Common Stock distributed to holders of Fat Brands Class A Common Stock, divided by the sum of all shares of Fat Brands Class A Common Stock outstanding on the record date plus the number of unexercised Warrants on the record date, but not below zero. Based on an external valuation of Twin Hospitality received by Fat Brands, we expect that the fair market value of Twin Common Stock will be set at $20.00 per share for purposes of the Warrant adjustment, resulting in a downward adjustment of the Warrant exercise price in excess of $2.2142. As a result, we expect that the Warrant exercise price will be adjusted to zero immediately following the record date.”