The offer price marks a premium of more than 53% to Recipe's last close. The shares have fallen 24% this year on broader market weakness following monetary tightening by central banks across the world.
Buyout firms have doubled down on take-private dealmaking opportunities as lower valuations make it easier to lure businesses away from the stock market at bargain prices.
These firms spent a record $226.5 billion on such transactions around the world in the first half of 2022, up 39% from the same period last year, Dealogic data shows.
Recipe said it had entered into a letter of intent with Fairfax, adding its board would recommend shareholders vote in favor of a takeover once the deal was finalized.
Founded in 1883, Vaughan, Canada-based Recipe operates brands such as Kelseys, East Side Mario's and New York Fries. As of June-end, the company had over 1,200 restaurants in Canada, the United States, Saudi Arabia, India and the United Arab Emirates.
Investment bank Greenhill & Co Canada Ltd was advising Recipe on the deal.
($1 = 1.29 Canadian dollars)
(Reporting by Niket Nishant in Bengaluru; Editing by Shinjini Ganguli)