The new combined company would be based at the current headquarters of Tim Hortons, in Oakville, Ont. Burger King would continue to maintain its global home in Miami.
The deal is structured as follows:- 3G Capital, the investment firm that owns Burger King, would pay $65.50 in cash for every Tim Hortons share already out there.
- In addition to that cash, every Tim Hortons shareholder would get 0.8025 shares in the new, as yet unnamed company.
That would bring the cash value of the deal for current Tim Hortons owners to more than $94 per share.
Shareholders also would have the right to choose an all-cash or all-stock option. The $94 figure is 39 per cent higher than the average price Tim Hortons shares have traded at for the past month.
The boards of both companies have unanimously approved the transaction. Two-thirds of Burger King is owned by 3G, so the deal has been consummated on that end, but Tim Hortons shareholders have to vote to approve it.
Regulators in the U.S. and Canada will also likely want a say.
The two companies will hold a news conference at 11 a.m. on Tuesday to discuss the deal with analysts and the media.
After gaining 20 per cent Monday, when the two companies confirmed they were in talks, Tim Hortons shares gained another 10 per cent in premarket trading on Tuesday following word of a concrete offer.
Shares in the new company will list both on the TSX and NYSE. 3G capital will still own a controlling interest, 51 per cent, of the new company.
Daniel Schwartz, CEO of Burger King, would also become CEO of the new company. Current Tim Hortons CEO Marc Caira would become a director of the new company, as well as its vice-chairman.
The new company's board would include the current eight Burger King directors and three directors to be appointed by Tim Hortons, including Caira.