MEMPHIS, Tenn. — Back Yard Burgers Inc. turned down an offer from Cherokee Advisors LLC to buy the restaurant chain. Back Yard chairman Lattimore Michael said selling to Cherokee Advisors could disrupt the board's plans to retain a new chief executive.
"Our initial concerns about the timing of Cherokee's proposal are heightened by the proximity of Cherokee's SEC filing on June 5, 2006, to our annual franchisee meeting next week," Michael said.
The Back Yard board received a letter from Cherokee Advisors LLC dated April 28, expressing an interest in acquiring the company. According to a news release, the board's determination was based, in part, on Cherokee Advisors' failure to prove that they had sufficient capital and funding necessary to perform its obligations under a merger agreement and fund the proposed transaction.
But the burger chain hasn't ruled out Cherokee Advisors as a potential suitor. The release said Back Yard will continue to review any proposals from Cherokee Advisors in accordance with its fiduciary duties.
