Carpinteria-based CKE Restaurants announced April 24 that it will be acquired by an affiliate of Apollo Management.
Under the terms of the agreement, CKE stockholders will receive $12.55 per share in cash, representing a 41 percent premium to the company’s closing share price on Feb. 25 and a 14 percent premium over an earlier offer that CKE accepted from Thomas H. Lee Partners.
CKE stock fell four percent on Monday morning to $12.35. It has risen 38 percent since the THL deal was announced Feb. 26.
CKE said April 7 that it had received a rival proposal that topped THL’s bid. The buyer turned out to be Colombia Lake Acquisition Holdings, an Apollo affiliate. Apollo is headed by Leon Black, the former head of mergers and acquisitions at Drexel Burnham Lambert. His previous takeovers include Linens ’n Things, Smart & Final and Vail Resorts.
The CKE board of directors unanimously approved the merger agreement and is recommending that shareholders approve it, the company announced April 26.
The transaction is valued at approximately $1.0 billion, CKE said, including the refinancing of the company’s debt. Affiliates of Morgan Stanley, Citi and RBC Capital Markets have provided an aggregate $700 million financing for the transaction.
“This is a very exciting and positive development for the company, its shareholders, franchisees and employees. … Our franchisees and employees will also benefit from Apollo’s retail sector experience and widely acknowledged financial expertise,” CKE CEO Andrew Puzder said in a news release issued April 26.
After the merger, CKE will become a private company, owned by the Apollo affiliate.