CARA Operations (TSX:CARA)

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OnlyMyOpinion
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CARA Operations (TSX:CARA)

Post by OnlyMyOpinion »

I see CARA is available for expressions of interest now. Writeup here:
http://www.canadianbusiness.com/busines ... -at-19-22/
Last edited by Peculiar_Investor on 14 Apr 2015 13:47, edited 1 time in total.
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Re: CARA

Post by randomwalker »

Swiss Chalet aims to raise $200 million
The price values the company at $1 billion to $1.1 billion, depending on the final share price.
By: Dana Flavelle the Toronto Star, March 23 2015

http://www.thestar.com/business/2015/03 ... n-ipo.html

I remember making some money on this when the fighting Phelans took it private back in around 2003. Not interested in this offering I'll keep owning some via my position in Fairfax Financial (FFH)

ps I believe Paul David Phelan is still involved with and trying to turn around the Second Cup (SCU)
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Peculiar_Investor
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Re: CARA Operations (TSX:CARA)

Post by Peculiar_Investor »

In the news today with the announcement that Cara Operations to merge with Keg Restaurants Ltd.. Of potential interest of shareholders in the Keg Royalties Income Fund ("The Fund") (KEG.UN) which gets periodic mention here on FWF but doesn't seem to have a dedicated topic (yet??)
Cara Operations press release wrote:The Fund will remain in its current form and will continue to receive royalties from Keg restaurants operated by KRL following the merger. The trustees of the Fund have considered the effect of the transaction on the interests of the Fund's unitholders and the rights of The Keg Rights Limited Partnership under its agreements with KRL, which will be preserved without modification.
I checked News | The Keg Royalties Income Fund and they haven't posted anything about this transaction and the impact, if any, to their business.

Also found in somewhat interesting that back in October 2017, Cara Operations Limited announces purchase of Pickle Barrel.

There seems to be a pattern of consolidation happening in this space.
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westcoastfella
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Re: CARA Operations (TSX:CARA)

Post by westcoastfella »

Peculiar_Investor wrote: 23 Jan 2018 09:40 I checked News | The Keg Royalties Income Fund and they haven't posted anything about this transaction and the impact, if any, to their business.
The Cara article includes this:
The Fund will remain in its current form and will continue to receive royalties from Keg restaurants operated by KRL following the merger. The trustees of the Fund have considered the effect of the transaction on the interests of the Fund's unitholders and the rights of The Keg Rights Limited Partnership under its agreements with KRL, which will be preserved without modification.
Sounds like the fund (the KEG trust) will continue to operate as is, and there is no expectation that this merger will impact them?
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Re: CARA Operations (TSX:CARA)

Post by lacrosse905 »

My opinion only.... and as a long time owner of The Keg stock I don't think they will keep paying the premium dividend that the Keg Royalty Fund currently pays...I could be wrong, but assurances at this point mean nothing, I feel that the Keg may have to change the quality of food and service going forward with Cara. Sold today at $20.00 at open this morning. :thumbsup: :thumbsup:
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Re: CARA Operations (TSX:CARA)

Post by Sensei »

Hi,

I have only a modest holding in KEG, but I'm really annoyed by this news. I don't see how this deal will help me. Just as one red flag, usually when such an agreement is announced, the share (unit) value should go up for the acquiree, not down. That is worrying.

I agree with Lacrosse905 that it does not bode well for the customer either. I made a special point of going to the Keg this summer and really enjoyed the food and service. We don't have that kind of restaurant at that price anywhere in Tokyo. It seems to me that in the restaurant business, expansion is good to a certain point, but overexpansion is bad. Simply not possible to maintain the same quality. Sourcing the best food becomes a problem in my opinion.

Anyway, I'd like to hear from KRL about exactly why this deal is good for me, and soon, or I will follow Lacrosse and dump my shares.
Cheers

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Re: CARA Operations (TSX:CARA)

Post by Shakespeare »

One wonders if, like the acquisition of THI by Restaurant Brands, the brand will be milked and run into the ground for current profits.
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
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Re: CARA Operations (TSX:CARA)

Post by AltaRed »

The news releases suggest Cara wants to build an 'upscale' group of restaurants by keeping the Keg operations and staff in place. We shall see how that really works out when Cara itself runs econo brands. Remains to be seen I guess.
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Re: CARA Operations (TSX:CARA)

Post by Hammerer »

AltaRed wrote: 24 Jan 2018 01:12 when Cara itself runs econo brands.
Milestones?
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Re: CARA Operations (TSX:CARA)

Post by AltaRed »

Hammerer wrote: 25 Jan 2018 18:47
AltaRed wrote: 24 Jan 2018 01:12 when Cara itself runs econo brands.
Milestones?
I realize Cara already has Milestones but they have not done much to make it a top 5 choice. I look forward to an improvement when/if it rolls into their upscale division. Milestones was a 'go to' for us years ago but there is better food and environment with competing operations like Joey's, Browns Social House, etc. Spouse and I have not been to a Milestones in about 3 years. It always feels like they are a volume operation rather than a proud 'local' restaurant with staff that behave like they want to be there. Like the difference between a good cotton shirt and a blend from China.
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Re: CARA Operations (TSX:CARA)

Post by Hammerer »

Thanks for the substantial comment. I'll pay better attention. I'll agree that The Keg is better.
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Re: CARA Operations (TSX:CARA)

Post by RomaneeConti »

I remember some of Cara's past restaurants and retail stores:
- Steak n Burger
- O'Toole's
- Grand and Toy

With Harvey's and Swiss Chalet and even Milestones, Cara seems to prefer restaurants that serve the mid-price total-bill market, not the high-price total-bill market. Many of their restaurants are franchised, and unfortunately the quality and consistency of their service is location-by-location.

The Keg personally for me is my favorite steak chain for food quality vs price, and consistency of excellent customer service. Their restaurants are company-owned completely, not franchised, I believe. I am not convinced these dimensions are in the Cara expertise. However, the former owner of the Keg, before Fairfax took the majority, David Eisenstat, will continue to operate The Keg. He will now have to also run Cara's other higher end restaurants.
https://en.wikipedia.org/wiki/The_Keg

The Income Trust, of which I have a miniscule holding, might suffer if restaurant revenues fall after the Cara influence.
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