The Keg Restaurants Ltd. owner David Aisenstat confirmed to Business in Vancouver November 18 that he will stay on as CEO after he has sold a 51% stake in his chain of more than 100 steakhouses to Toronto-based Fairfax Financial Holdings Ltd. (TSX:FFH).
"I still have 49% and operational control for many years going forward," Aisenstat told BIV. "The key with Fairfax's participation is that there will be more opportunities going forward."
Fairfax, which owns a significant stake in BlackBerry Ltd. (TSX:BB) and recently pulled out of negotiations to buy the troubled smartphone maker for US$4.7 billion, has deep pockets.
It also, according to Aisenstat, has an experienced and capable executive team.
Financial details of the deal expected to close in January 2014 have not been disclosed.
Two Keg restaurants are set to open in the next month: one in Montreal and the other in Guelph, Ontario.
Aisenstat said he plans to move his Keg restaurant on Thurlow Street, near Robson Street, to Alberni Street "in March or April" to space that was formerly home to Ki Restaurant, which Aisenstat owned separate from his Keg chain.
He has long spoken about opening a Keg on Davie Street in the Hy's Mansion site that he owns although those plans are in limbo.
"We haven't made a decision on that yet," he said.
Units of The Keg Royalties Income Fund (TSX:KEG.UN), which owns certain trademarks used by The Keg, rose almost 5% at the start of trading, following a Keg press release to announce the sale. Units then fell back to close at $16.26, or up 0.62%.
Keg Restaurants Ltd. pays the income fund a 4% royalty based on system-wide sales of 102 Keg Restaurants that are in a royalty pool.
Last week, the fund reported that it generated operating income of $16.9 million from sales of $354.8 million for the nine-month period ending September 30, 2013. That's up slightly from the $16.8 million in operating income from restaurant sales of $362.2 million for the same period in 2012.
