Corrected: CKE Restaurants Inc. has announced that it has received a superior bid from a second bidder for $12.55 per share. CKE, parent company of Carl's Jr. and Hardee's, received the formal bid Sunday, and its board of directors approved it on Monday.
Western Acquisition Holdings Inc., an affiliate with private-equity firm Thomas H. Lee Partners, has until 12:01 a.m. Eastern time April 24 to come up with a superior offer.
Previously, CKE agreed to a takeover bid from Thomas H. Lee Partners for $11.05 per share, or $619 million in cash. The company announced the altervative bid from the unnamed bidder just as the deadline to finalize the original THL Partners deal was set to expire. Reuters reported earlier that the superior bid was made by Apollo. CKE spokeswoman Beth Mansfield could not confirm or deny the identity of the second bidder.
*QSRweb.com initially misidentified Western Acquisition as the superior bidder and has updated the information after clarification from CKE Restaurants.
Takeover trend
Restaurant companies seem ripe for takeover, especially by private-equity firms. In the past month, a pizza chain and a fast casual wing chain have been snatched up by separate firms. Papa Murphy's Take 'N' Bake signed a definitive agreement for a takeover by New York-based private equity firm Lee Equity Partners for roughly $180 million, and Atlanta-based private equity firm Roark Capital Group's affiliate acquired Wingstop Restaurants Inc. Roark Capital Group's FOCUS Brands' franchise portfolio includes quick-service chains Carvel and Cinnabon.
Analysts have been speculating about other potential restaurant brand takeovers since CKE first announced the bid from THL Partners in February. Shares of Jack in the Box Inc. and Sonic Corp. rose in the days after that bid as speculation circulated that they two brands could be takeover targets. Stifel Nicolaus analyst Steve West said then that both companies have value, particularly Jack in the Box, a regional burger chain similar to Carl's Jr., because of its low debt and refranchising program, Yahoo! Finance reported earlier. But Sonic was described as undervalued "because its fundamentals haven't been good."
The Papa Murphy's deal in particular reveals that the current environment has created a seller's market, The Wall Street Journal reported after that takeover was announced.
From the story:
After a two-year pause, billions of dollars of uninvested private-equity money is sloshing around out there looking for deals. Consumer-focused private-equity types say that there are a limited number of exciting food concepts out there . When a Papa Murphy's goes on the block, buyers are willing to bake in a lot of hope.
