CKE Restaurants Inc. has accepted the superior alternative takeover bid that was made April 19 by Columbia Lake Acquisition Holdings Inc., an affiliate of Apollo Global Management. Apollo, a leading global alternative asset manager, has agreed to acquire CKE, which includes the Carl's Jr. and Hardee's brands, for $12.55 per share in cash.
The company has terminated the merger agreement previously entered into with affiliates of Thomas H. Lee Partners LP.
Under the terms of the agreement, CKE stockholders will receive $12.55 in cash for each share of CKE common stock they hold, representing a 41 percent premium to the company's unaffected closing share price on Feb. 25 and a 14 percent premium over the merger agreement previously entered into with affiliates of THL Partners.
CKE's board of directors has unanimously approved the merger agreement and has resolved to recommend that CKE shareholders adopt the agreement. The transaction is valued at approximately $1.0 billion, including the refinancing of the company's outstanding indebtedness. Affiliates of Morgan Stanley, Citi and RBC Capital Markets have provided an aggregate $700 million financing commitment in support of the transaction.
"This is a very exciting and positive development for the Company, its shareholders, franchisees and employees," CKE chief executive Andrew F. Puzder said in a news release. "The Apollo transaction provides substantial added value for our shareholders and is a testament to our board's diligent efforts on behalf of our shareholders. Our franchisees and employees will also benefit from Apollo's retail sector experience and widely acknowledged financial expertise. We view this as an exceptionally positive transaction on all fronts."
Transaction details
Completion of the transaction, which is expected to occur by the end of the second quarter of fiscal 2011, is contingent upon customary closing conditions, including approval by holders of the majority of CKE's outstanding shares, the receipt of customary regulatory approvals, and other customary closing conditions. A special shareholders meeting will be scheduled at a later date. The merger agreement does not include a financing condition. Upon completion of the merger, CKE will become a private company, wholly-owned affiliate of Apollo Global Management.
