CKE Restaurants Inc.'s alternate bidder is private equity firm Apollo Management, Reuters reports.
CKE, parent company of Carl's Jr. and Hardee's, announced on Wednesday that it had received an alternative takeover bid by an unnamed company, one which could lead to a superior proposal to the initial bid by THL Partners.
Financial details were not disclosed, and the offer is subject to several conditions, CKE said earlier. Negotiations and discussions can continue until 12:01 p.m. Eastern time April 27, an extension of the original 40-day period set forth in the agreement with THL.
According to Reuters, analysts doubt the alternate bid is a superior deal.
From the story:
"Given the challenges of CKE in California and solvency issues with their Hardee's franchisees, any potential bidder relying on outside financing may find it difficult to secure the necessary funds," Global Hunter Securities analyst Conrad Lyon told Reuters."So it is likely far from certain that the new bid will prove superior to THL's offer," he said.
Apollo owns a number of entertainment, manufacturing and retail companies, including value-priced fashion accessories chain Claire's Stores, Harrah's Entertainment. Jacuzzi Brands and Prestige Cruise Holdings.
CKE has reported negative same-store sales for its brands for more than a year as Carl's Jr.'s core California market has been hit with high unemployment rates. In March, CKE reported its fourth quarter comps for Carl's Jr. company-operated stores were down 8.7 percent. Comps for the period ended March 22 had improved slightly to negative 7.6 percent.
On Tuesday, a New York-based investment manager holding almost 2.3 million shares in CKE wrote a letter to the company expressing extreme dissatisfaction with THL's plan to take the company private and in the bid price.
Shares in CKE jumped after the initial takeover bid and have trended around $11. After the alternative bid announcement, stocks have traded as high as $12.13 and closed at $12.00 April 8.
