News

Securities investigators probe legality of $1.8 billion RBI-Popeyes deal

February 22, 2017

Tuesday morning's announced Restaurant Brands International purchase of Popeyes Louisiana Kitchen was soon followed that afternoon by news that securities litigation law firm, Bower Piven, is investigating the proposed buyout for "possible breaches of fiduciary duty and other violations of state law by the board of directors of Popeyes," according to a news release from the firm. 

Under terms of the $1.8 billion RBI deal, Popeyes shareholders will get $79 in cash for each share of the common stock in the chicken chain. Bower Piven said the investigation is focused on whether Popeyes board failed to satisfy their duties to shareholders, including whether they "adequately pursued alternatives to the acquisition and whether the board obtained the best price possible," according to a news release. 

This comes on the heels of news that Popeyes' leadership also received an offer from Arby's for a reverse takeover of the Popeyes chain for the company’s shares of common stock, according to a story on Bloomberg.com late Tuesday afternoon. Bloomberg said an unknown source with knowledge of Arby's offer said it was made over the weekend and would have paid shareholders $40 in cash per share and equity in the new combined company. Under that deal, Bloomberg reported that Arby's backer, Roark Capital Group, would own 80 percent of those shares. In total, that proposal would have been valued at $90 a share, according to the Bloomberg report. 

RBI's offer was all cash, which Popeyes leadership preferred because it had lower execution risk, according to Bloomberg.

QSRweb has inquiries in to Arby's, Popeyes and RBI for further comment. In the meantime, Bower Piven asked current Popeyes stockholders who feel the RBI deal is too low to contact the securities litigators for additional information about their investigation, according to a news  release.