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Fairfax agrees to acquire majority stake in The Keg

Monday, 18 Nov 2013 | 10:02 AM ET

Nov 18 (Reuters) - Fairfax Financial Holdings Ltd has agreed to acquire a majority interest in privately held Keg Restaurants Ltd (KRL), which owns over 100 steak house restaurants in Canada and parts of the United States.

The terms of the deal, which is expected to close early next year, were not disclosed.

Canadian restaurateur David Aisenstat will retain a minority 49 percent stake in the Keg and will remain head of operations, as president and chief executive.

KRL, in a statement on Monday, said the transaction will benefit The Keg Royalties Income Fund, which owns certain trademarks and other related intellectual property used by KRL. In exchange for use of those trademarks, KRL pays the fund a royalty of 4 percent of gross sales of Keg restaurants, KRL said.

"Fairfax is a well-known and proven investor in the Canadian market. With the addition of Fairfax to the Keg team, The Keg is well positioned and has a solid foundation for continued growth, which will benefit the fund and its unitholders," Kip Woodward, chairman of the fund, said in a statement.

Toronto-based Fairfax, headed by Canadian value investment guru Prem Watsa, is the largest shareholder of BlackBerry Ltd . The firm has been in the spotlight this year as, in September, it made a tentative bid to take the struggling smartphone maker private. However that deal was aborted earlier this month, and Fairfax opted to lead a $1 billion debt financing deal to help BlackBerry turn around its fortunes.