Restaurant Finance Across America
Archived postings from August, 2012...
J. Alexander's Nears Deal With Mystery Bidder
Posted: Fri, August 31, 2012 at 8:16pm (CDT)
The board at Nashville-based J. Alexander's yesterday decided that a $14.25-per-share offer from a strategic buyer identified only as Party F is superior to Fidelity's $13 deal, according to SEC filings. The Florida-based insurer now has five days to decide whether to match that price. ...continue reading.
Will Fidelity Get J. Alexander's?
Posted: Thu, August 30, 2012 at 1:57pm (CDT)
The Privet Fund, the Atlanta-based hedge fund that is J. Alexander's largest shareholder, sent a letter to the Nashville chain's board yesterday, urging them to create a more level playing field between Fidelity and two other bidders seeking to buy the company. The letter comes amid considerable speculation over the identity of those two bidders. ...continue reading.
Ruby Tuesday Bucks The Refranchising Trend
Posted: Tue, August 28, 2012 at 2:23pm (CDT)
When our sister publication, Franchise Times, publishes its annual ranking of the largest franchise systems in October, one company you won't see is Ruby Tuesday. So many franchisees in the system have either shut their doors or sold their units to the company that it is no longer really considered a true franchise. ...continue reading.
The Price For J. Alexander's Keeps Going Up
Posted: Mon, August 27, 2012 at 10:17am (CDT)
The accidental auction for J. Alexander's continued over the weekend, when a third company—described previously as a large strategic buyer—upped the bid for the Nashville-based casual dining chain to $14.25 a share, proving again that Fidelity's initial, $12 cash-and-stock offer was way too low. ...continue reading.
The Refranchising Trend Keeps Chugging Along
Posted: Fri, August 24, 2012 at 4:16pm (CDT)
With its recent sale of 121 more company units to Heartland Food Corp., Miami-based Burger King has now sold nearly 500 company units to just three companies in a few short months. That may be a large number, but the QSR chain is hardly alone in its desire to get away from operating its own stores. ...continue reading.
The Franchisee Lawsuit Makes A Comeback
Posted: Thu, August 23, 2012 at 4:43pm (CDT)
Earlier this week, franchisees in New Jersey filed a lawsuit against Dunkin' Donuts, accusing the Massachusetts-based coffee-and-doughnut chain of "systemic racial descrimination" against African Americans and Asians--and in the process signaling that the franchisee lawsuit is making a comeback. ...continue reading.
Ice Cream Fuels Burger King's Surge
Posted: Thu, August 23, 2012 at 1:37pm (CDT)
Burger King is enjoying a nice run right now, a strong bit of momentum not seen in the Miami-based chain in several years. But among all the efforts that has helped generate traffic and sales at the burger chain, there's one promotion that has been overlooked: ice cream. ...continue reading.
Restaurants' Health Care Challenge
Posted: Tue, August 21, 2012 at 5:14pm (CDT)
The restaurant industry has been among the most vocal opponents to the expansion of health insurance that goes into effect in 2014, because it is a competitive, labor-heavy business. Still, according to some observers, many operators aren't doing enough to prepare for the changes the law will make in their labor costs. ...continue reading.
The Strategic Buyer Makes A Comeback
Posted: Mon, August 20, 2012 at 4:56pm (CDT)
For some time, strategic buyers had all but disappeared from the restaurant landscape, but for Landry's owner Tilman Fertitta. Private equity groups snapped up all of the available companies. Now, following a series of deals and proposals, the strategic buyer has returned with a vengeance. ...continue reading.
The Mystery Bidder May Get J. Alexander's
Posted: Mon, August 20, 2012 at 11:53am (CDT)
Don't look now, but an unknown restaurant chain may well end up with J. Alexander's. According to an SEC filing on Monday, the Nashville-based chain's board of directors decided on Friday that it had a legal obligation to keep negotiating with a bidder described only as "Party G." ...continue reading.
Bennigan's Could Double Its U.S. Footprint
Posted: Mon, August 20, 2012 at 10:11am (CDT)
When the recession hit in earnest in 2008, Bennigan's was the first, and worst, and best-known, casualty. But in what is yet another lesson in how hard it is to kill a restaurant chain, the Dallas-based brand survived, and this morning it announced a deal with a shopping center developer that could double its domestic footprint. ...continue reading.
Yup, Biglari Wants On The Cracker Barrel Board
Posted: Thu, August 16, 2012 at 5:12pm (CDT)
In a move that should come as no surprise whatsoever, Sardar Biglari, the San Antonio-based investor, has nominated himself and his assistant, Phil Cooley, to the Cracker Barrel board—the second time in two years he has sought representation at the Nashville-based family dining chain. ...continue reading.
How Remodels Cull The Restaurant Herd
Posted: Thu, August 16, 2012 at 4:34pm (CDT)
What do you do if you have an aging restaurant chain with a lot of weak, ugly stores in bad locations? Demand remodels and force them to shut down. This is one of the unseen impacts of broad-based costly remodel programs that are pervasive in the restaurant industry right now. ...continue reading.
Casual Dining Chains Still Losing Customers
Posted: Wed, August 15, 2012 at 3:26pm (CDT)
Yesterday, the market research firm NPD Group noted that restaurant traffic "lost its upward momentum" this spring. What it should have said was this: diners are still fleeing from restaurants with wait staff, but they're not going to fast food places as often as they did this winter to make up for the loss. ...continue reading.
J. Alexander's Turns Down A Higher Offer
Posted: Mon, August 13, 2012 at 5:31pm (CDT)
J. Alexander's is turning down $6 million. The Nashville-based casual dining chain said in an SEC filing today that its board "unanimously" decided against an $84 million offer from a strategic buyer known only as "Party G," citing concerns of the buyer's financial solvency and its reliance on debt to make the deal. ...continue reading.
Ruby Tuesday To Give Beall A Parting Gift
Posted: Mon, August 13, 2012 at 11:38am (CDT)
Sandy Beall has led Ruby Tuesday since he founded the restaurant chain back in 1972, so it should come as no surprise that he'll get more than a gold watch when he retires later this year. In fact, he'll be able to buy plenty of gold watches when he gets a $2.2 million cash "severance payment." ...continue reading.
CKE And The Glut Of Restaurant IPOs
Posted: Fri, August 10, 2012 at 9:28am (CDT)
Those of you who were eager to buy stock in the owner of Hardee's and Carl's Jr. will have to wait a while longer, thanks to CKE Inc.'s decision last night to postpone its initial public offering—halting, for now, what had been the company's superquick move back to the equity markets. ...continue reading.
Dunkin's Shareholders Head For The Exit
Posted: Thu, August 09, 2012 at 5:07pm (CDT)
For the second time this year, Dunkin' Brands major shareholders are selling more stock, and this time it could be their final exit. The Canton, Massachusetts-based company said this afternoon that its major shareholders plan to sell 21 million shares in a secondary offering, the second one this year. ...continue reading.
Outback's Owner Has A Tough IPO
Posted: Wed, August 08, 2012 at 11:59am (CDT)
By appearances, Outback Steakhouse owner Bloomin' Brands had a good debut on Wall Street. The company started trading mid-morning, and rose more than 12 percent. But that hides what surely has to be considered a disappointing early start in its IPO. ...continue reading.
McDonald's Has A Bad Month
Posted: Wed, August 08, 2012 at 9:33am (CDT)
Don't look now, but the giant is stumbling. McDonald's, the venerable burger chain that for so long could seemingly do no wrong, just reported its worst month in about a decade: flat comparable store sales for the month, and an overall decline in system sales of 2.3 percent. ...continue reading.
J. Alexander's Gets A $14-Per-Share Offer
Posted: Tue, August 07, 2012 at 10:59am (CDT)
Fidelity National Corp. said this morning it has commenced its $13-a-share tender offer for J. Alexander's, but it may want to hold off on any plans for a victory party. Another company, described only as a strategic buyer, has made an all-cash offer of $14 a share for the Nashville-based chain. ...continue reading.
Woodhouse To Retire As Cracker Barrel Chairman
Posted: Mon, August 06, 2012 at 4:36pm (CDT)
Michael Woodhouse, who had been the focal point of criticism from activist investor Sardar Biglari, plans to retire as chairman of Tennessee-based Cracker Barrel this November. He'll be replaced by the family dining chain's newest director, James Bradford. ...continue reading.
An Investor Buys Up Morgan's Foods Stock
Posted: Mon, August 06, 2012 at 2:48pm (CDT)
For the past couple of years, stock in Ohio-based KFC franchisee Morgan's Foods has hovered between 30 cents and $1.25 and barely budged even when the company announced a big sales increase last quarter. So when the company's stock more than tripled in price in the past three weeks, we took notice. ...continue reading.
Dangerous Precedents In The Chick-fil-A Controversy
Posted: Fri, August 03, 2012 at 12:31pm (CDT)
I have worked hard to avoid writing anything about the Chick-fil-A controversy, mostly because anything I did say would drown in the ocean of voices chiming in on the topic. Yet there are some issues that restaurant operators, and their franchisors, should be watching carefully. ...continue reading.
Growth Chains Take A Beating
Posted: Thu, August 02, 2012 at 4:59pm (CDT)
On the morning of July 17, Denver-based Chipotle Mexican Grill opened trading at $400 a share, giving it a market cap of $12.7 billion. One quarterly report and two weeks later, the company is trading at $283.77 with a market cap of $8.99 billion. It lost more market value in 15 days than most companies dream of ever achieving. ...continue reading.
Is The Small IPO Making A Comeback?
Posted: Wed, August 01, 2012 at 4:59pm (CDT)
Texas-based Mexican chain Chuy's went public nine days ago at $13 a share. It rose to as high as $18, but has thus far has stayed far above its initial offering price. This should be really good news for owners of small, high-growth restaurant chains, because it may well mean that the small IPO has made a comeback. ...continue reading.