As announced on April 24, 2010, CKE Restaurants, Inc. (NYSE:
CKR) (“CKE” or the "Company") has entered into a definitive merger
agreement to be acquired by an affiliate of Apollo Global
Management ("Apollo"), a leading global alternative asset
manager.
Under the terms of the agreement, CKE stockholders will receive
$12.55 in cash for each share of CKE common stock they hold,
representing a 41% premium to the Company's unaffected closing
share price on February 25, 2010, and a 14% premium over the
consideration provided by the merger agreement previously entered
into with affiliates of Thomas H. Lee Partners, L.P.
CKE’s board of directors has unanimously approved the merger
agreement and has resolved to recommend that CKE shareholders adopt
the agreement. The transaction is valued at approximately $1.0
billion, including the refinancing of the Company’s outstanding
indebtedness. Affiliates of Morgan Stanley, Citi and RBC Capital
Markets have provided an aggregate $700 million financing
commitment in support of the transaction.
CKE's chief executive officer, Andrew F. Puzder, said, “This is
a very exciting and positive development for the Company, its
shareholders, franchisees and employees. The Apollo transaction
provides substantial added value for our shareholders and is a
testament to our Board’s diligent efforts on behalf of our
shareholders. Our franchisees and employees will also benefit from
Apollo’s retail sector experience and widely acknowledged financial
expertise. We believe this is an opportunity to partner with a
premier private equity firm that has a proven record for fostering
operational excellence, supporting growth and adding value in its
portfolio companies. We view this as an exceptionally positive
transaction on all fronts.”
Peter P. Copses, a Senior Partner at Apollo, said, “We are
extremely pleased to be acquiring CKE and look forward to working
with its outstanding management team, employees and franchisees to
continue to build the Company’s market leading brands. We are
firmly committed to CKE’s continued growth as an industry-leading
quick service restaurant operator.”
Transaction Details
Completion of the transaction, which is expected to occur by the
end of the second quarter of fiscal 2011, is contingent upon
customary closing conditions, including approval by holders of the
majority of CKE's outstanding shares, the receipt of customary
regulatory approvals, and other customary closing conditions. A
special shareholders meeting will be scheduled at a later date. The
merger agreement does not include a financing condition. Upon
completion of the merger, CKE will become a private company,
wholly-owned by an affiliate of Apollo Global Management.
UBS Investment Bank is acting as financial advisor to CKE, and
Stradling, Yocca, Carlson & Rauth and Potter Anderson &
Corroon LLP are acting as CKE’s legal advisors. As mentioned above,
Morgan Stanley, Citi and RBC Capital Markets are providing debt
financing for the transaction and Citi is also acting as Apollo's
sole financial advisor. Morgan, Lewis & Bockius and Morris,
Nichols, Arsht & Tunnell are acting as Apollo’s legal
advisors.
FORWARD-LOOKING STATEMENTS
This filing contains "forward-looking statements" within the
meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements give the
Company's current expectations or forecasts of future events. Such
statements are subject to risks and uncertainties that are often
difficult to predict and beyond the Company's control, and could
cause the Company's results to differ materially from those
described. These uncertainties and other factors include, but are
not limited to, risks associated with this transaction, including
the occurrence of any event, change or other circumstances that
could give rise to the termination of the new merger agreement, the
inability to complete the transaction due to the failure to obtain
shareholder approval or the failure to satisfy other conditions to
completion of the transaction, including the expiration of the
waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976 and the failure to obtain the necessary debt financing
arrangements set forth in the debt commitment letter received in
connection with the transaction. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date they are made. The Company undertakes no
obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise, except as required by law or the rules of the New York
Stock Exchange. Accordingly, any forward-looking statement should
be read in conjunction with the additional information about risks
and uncertainties as discussed in the Company's filings with the
SEC.
ADDITIONAL INFORMATION ABOUT THE PROPOSED MERGER AND WHERE TO
FIND IT:
In connection with the proposed transaction, the Company will
file a new proxy statement and other materials with the SEC.
INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE PROXY
STATEMENT AND THESE OTHER MATERIALS WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY
AND THE PROPOSED TRANSACTION. Investors and security holders may
obtain a free copy of the new proxy statement (when available) and
other documents filed by the Company with the SEC at the SEC's Web
site at www.sec.gov.
The proxy statement and such other documents will also be
available for free on the Company's website at www.ckr.com under
"Investors/SEC Filings" or by directing such request to Investor
Relations, CKE Restaurants, Inc., 805-745-7750.
The Company and its directors, executive officers and other
members of its management and employees may be deemed to be
participants in the solicitation of proxies from its shareholders
in connection with the proposed merger. Information concerning the
interests of the Company's participants in the solicitation is set
forth in the Company's proxy statements and Annual Reports on Form
10-K, previously filed with the Securities and Exchange Commission,
and in the proxy statement relating to the proposed transaction
when it becomes available.
About CKE Restaurants, Inc.
Headquartered in Carpinteria, Calif., CKE Restaurants, Inc. is
publicly traded on the New York Stock Exchange under the symbol
"CKR." As of the end of its fiscal 2010, CKE Restaurants, Inc.,
through its subsidiaries, had a total of 3,141 franchised, licensed
or company-operated restaurants in 42 states and in 16 countries,
including 1,224 Carl's Jr. restaurants and 1,905 Hardee's
restaurants. For more information about CKE Restaurants, please
visit www.ckr.com.
About Apollo Global Management
Apollo is a leading global alternative asset manager with
offices in New York, Los Angeles, London, Frankfurt, Luxembourg,
Singapore, Mumbai and Hong Kong. Apollo had assets under management
of over $53 billion as of December 31, 2009, in private equity,
credit-oriented capital markets and real estate funds invested
across a core group of nine industries where Apollo has
considerable knowledge and resources.
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