7 Jun 2013

Cooks buys franchising rights to Esquire Coffee Houses

1:57 pm on 7 June 2013

Shell company Cooks Food Group has bought the franchising rights to global coffee shop operator Esquires Coffee Houses in what is effectively a backdoor share market listing for Esquires.

Cooks, which is listed on the stock exchange's alternative market, is not disclosing the amount it paid for the rights.

The deal does not include the rights to the chain in New Zealand, Australia and Canada, which are not up for sale at the moment.

The purchase involves buying New Zealand company Franchise Development from Stuart and Lewis Deeks. Franchise Development and its subsidiaries hold the rights for about 50 Esquire Coffee Houses around the world including in Asia, the Middle East and Britain.

Cooks raised $4 million through selling shares to investors and has part-paid for the purchase by issuing shares to an entity controlled by the Deeks.

If existing shareholders approve, the Deeks will become the largest shareholders, owning more than half of the company.

The chairman of Cooks, Keith Jackson, says the deal will transform the firm from a shell company which will then change its name to Cooks Global Foods.

The deal needs the approval of shareholders, the Takeovers Panel and the NZX.