TORONTO - Fairfax Financial Holdings Ltd. (TSX:FFH) has joined the bidding for Prime Restaurants Inc. (TSX:EAT) with an offer of $71 million for the company that operates such eateries as East Side Mario's, Casey's and D'Arcy McGee's.
Prime says it solicited the offer from Fairfax under a provision of its agreement with Cara, which offered last month to pay $59 million for the company.
Cara said at the time of the Oct. 17 announcement that Prime's restaurants would fit into its own holdings, which include Swiss Chalet, Harvey's, Milestones, Montana's Cookhouse and Kelsey's restaurants.
Under its agreement with Prime, Cara now has five business days to submit another bid or back away and receive a termination fee.
"Cara is examining the acquisition proposal from Fairfax and will evaluate Cara's alternatives under the provisions of the acquisition agreement," the company ssid Monday after receiving Prime's notification.
Fairfax is offering $7.75 per share for Prime, compared with Cara's offer of $7 per share.
Both bids include a 25 cent special dividend that would be paid by Prime to its shareholders, with the remainder coming from the buyer.
Toronto-based Fairfax is primarily an insurance holding company but it also invests in other industries upon occasion.
For instance, it acquired a 19.7 per cent stake in a Montreal-based toymaker about a year ago as part of a recapitalization of Mega Brands Inc. (TSX:MB).
Prior to that, Fairfax invested in the former Canwest newspaper and television group, before the media company was dismantled and sold under court protection from creditors.
