News

Pizza Delight drops merger agreement with Afton Food Group

July 22, 2002

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BURLINGTON, Ontario -- Afton Food Group Ltd. (AFF-TSX) announced that the shareholders of Pizza Delight Corporation have terminated a share purchase agreement made between the companies on May 30.

An Afton press release stated that the company believes shareholders of Pizza Delight are in default of the agreement and have breached its terms and conditions. As a result, Afton has instructed its lawyers to begin legal proceedings.

Afton also stated that it will continue considering recapitalizing into an income trust.

The initial agreement would have made the shareholders of Pizza Delight the controlling shareholders of Afton, and its chief executive was to have served as the CEO and president of the merged companies.

In late June Afton postponed the merger to assess whether additional financial disclosure was required.

The deal was scheduled for completion on June 30.

Afton franchises 175 241 Pizza stores and approximately 225 other foodservice outlets across Canada, the U.S. and Saudi Arabia.

Pizza Delight Corporation is a Moncton, New Brunswick, franchisor of 114 Pizza Delight stores, 57 Canadian 2 for 1 Pizza stores, seven Pizza Patio stores and five Le Coq Roti locations, all of which are in Canada.