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Applebee's International, Inc. (NASDAQ: APPB) director Burton Sack, who is the company's largest individual shareholder with 3.2% of the stock, is planning to ask a Delaware court to award him more money for his shares of the company that has agreed to be acquired by IHOP Corp. (NYSE: IHP).Sack says he will seek to assert his appraisal rights, which allow him to have a court evaluate whether the deal provides full value to shareholders. If the court agrees with Sack, he could be awarded more money.
The Applebee's deal has been controversial from the beginning. Back in July, I wondered whether the deal was fair, asking If IHOP wants it, should Applebee's sell it? Then respected investor Sardar Biglari announced his opposition to the deal, pointing out that shares of IHOP rose more than shares of Applebee's when the deal was announced. It is extremely unusual for an acquirer to rise more than the target. Then it emerged that five Applebee's directors, including the chairman, CEO, and CFO had all opposed the deal. Then a pension fund sued Applebee's, alleging that the merger agreement was unfair to shareholders. That suit was settled.
Given all this controversy, and the strong opposition of influential investors, it's amazing that the deal is still going through. In what could be an indication that Applebee's has stronger growth potential than the buyout price reflects, the company will be opening its first Chinese location this week.
Sadly, there don't appear to be any indications that the dissident directors will make a late push to block the deal, probably because such an effort would likely be futile.
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Reader Comments (Page 1 of 1)
10-24-2007 @ 7:17PM
Robert said...
Applebees will be worth more after the sale. They plan on doing the franchise thing. Shareholders ARE being ripped off.
11-07-2007 @ 7:40PM
Joe T. said...
Just what this world needs: the combined resources of a pathetic, pre-made thaw/heat/serve "breakfast etc" pit with an overpriced, pre-made thaw/heat/serve "family/gather with co-workers and get drunk before driving home" unhealthy eatery. Doesn't anyone see that the "trendy foods" are 75% manufactured, frozen, and shipped in? Do you have any IDEA what makes the "shelf-stable, mouth feel, flavor masking etc" "food" filled with compounds, additives, and chemicals? Packaged, portion controlled, the same amount of "fake".
See: http://foodprocessing.com/ , http://www.preparedfoods.com/, http://www.qsrmagazine.com/ . I subscribe to all three, as the owner/chef of a single, non-chain diner. All those sauces, poppers, gourmet entrees, delivered.
If people knew what they were eating at chain/fast food "restaurants", they might run screaming. You're not eating an "original, fresh, chef prepared" meal unless you dine where "for two" starts at $100.00 or stop at an owner-run business.
Did you know that yum.com owns: A&W All American Food, KFC, Long John Silver's, Pizza Hut and Taco Bell? Or the fact that Tony’s®, Red Baron®, Freschetta®, Edwards®, Mrs. Smith’s®, Asian Sensations™, Larry’s®, and Chicago Town™ are all from the same- theschwanfoodcompany? Yes, those big yellow trucks of overpriced frozen foods. Next time you stand in the frozen pizza isle, just pick the cheapest one- they're all the same anyway. It doesn't stop here. They'd like you to think all these products are different, competing against each other. No, it's surprising how "diverse" companies can be. Example: P&G. Batteries, dogfood, toothpaste, cleaning solutions, coffee, diapers, Pringles, etc.?
Now go whip up a box of Hamburger Helper, put the frozen break-off cookie squares in the oven. After all, this is the "fa(t)st-food" overweight generation.