Get the perfect Travel Gadget for the jetsetter on your list!
Holidash Blog

AOL Money & Finance

Applebee's director to sue for money in IHOP deal

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.

Related Posts

Reader Comments (Page 1 of 1)

Symbol Lookup
IndexesChangePrice
DJIA+143.208,292.29
NASDAQ+31.311,429.38
S&P 500+18.33834.54

Last updated: December 02, 2008: 01:57 PM

BloggingStocks Exclusives

Hot Stocks

BloggingStocks Featured Video

TheFlyOnTheWall.com Headlines

WalletPop Headlines

AOL Business News

Latest from BloggingBuyouts

Sponsored Links

My Portfolios

Track your stocks here!

Find out why more people track their portfolios on AOL Money & Finance then anywhere else.

BloggingStocks Partners

More from AOL Money & Finance