If you were wondering why Twin Hospitality Group (TWNP) rose by about 50% on Monday:
It was no doubt due to the 8-K SEC filing late last Friday (provided below) that describes parent, FAT Brands’ (FAT) purchase of an additional $31M worth of subsidiary, Twin Hospitality (TWNP) stock. The purchase price was “at the market”, at $4.37/share, and the 7.1M shares represents about 12.6% of the 56M shares outstanding at the time of the IPO. It is important to note that the shares were purchased from the Company, liquidating funds owed from TWNP to FAT. This transaction increases FAT’s percentage ownership back over 90% fully diluted .
FAT Brands and Twin Hospitality have described their effort to raise equity capital from the market and/or renegotiate the terms of $400M+ of TWNP debt (which is not guaranteed by FAT). The recent transaction, while increasing FAT Brands’ debt (modestly, relative to the $1.3B, including TWNP’s $400M+) strengthens the TWNP balance sheet, and, by way of the 3M+ shares of TWNP that traded, provided an indication to the market that there is substantial interest in TWNP equity.
We will watch with interest as FAT/TWNP management pursue their joint expansion plan, at the same time working to delever both balance sheets.
Excerpt from 8-K filing:
“On June 4, 2025 (the “Effective Date”), Twin Hospitality Group Inc. (the “Company”) entered into an Exchange Agreement with FAT Brands Inc. (“FAT Brands”) pursuant to which FAT Brands exchanged liabilities due to it by the Company and its subsidiaries for additional shares of the Company’s Class A Common Stock (the “Common Stock”) at market value. In the transaction, the Company cancelled liabilities recorded as “due to affiliates” in its consolidated financial statements with a principal balance of $31,200,345 and issued to FAT Brands 7,139,667 shares of Common Stock at $4.37 per share, which was the greater of (i) the Nasdaq Official Closing Price of the Common Stock on the date immediately preceding the Effective Date and (ii) the average Nasdaq Official Closing Price of the Common Stock for the five trading days immediately preceding the Effective Date.”
Roger Lipton