CARPINTERIA, CALIF. – CKE Restaurants Inc. has entered into a definitive merger agreement to be acquired by an affiliate of Apollo Global Management, a leading global alternative asset manager. Headquartered in Carpinteria, Calif., CKE Restaurants Inc. had 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.
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 Feb. 25, 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.
“This is a very exciting and positive development for the company, its shareholders, franchisees and employees,” said Andrew Puzder, CKE's chief executive officer. “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.”
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.
Upon completion of the merger, CKE will become a private company, wholly-owned by an affiliate of Apollo Global Management.