Shares in IHOP Corp. continued to gain Tuesday after the company said it had agreed to buy bar-and-grill chain Applebee’s International Inc. for about $1.9 billion in cash.

IHOP Chief Executive Julia Stewart, a former Applebee’s executive, said once the deal closes, IHOP will revive the chain by turning it into a franchisor, selling most of the 500 company-owned stores at a rate of 40 per quarter. Stewart also added that IHOP plans to open 30 to 45 new-franchised Applebee’s restaurants per year.

“It’s a great brand, it just needs to be revitalized,” Stewart said on a conference call Monday. “We will fundamentally change the company’s business model, moving it nearly completely out of the role of owner-operator.”

Overland Park, Kan.-based Applebee’s has a total of 1,943 restaurants worldwide.

Under the deal, IHOP will pay $25.50 per share for Applebee’s 76 million outstanding shares, a 4.6 percent premium over Applebee’s closing price Friday.

IHOP is funding the transaction through about $2 billion securitized debt, and will pay down the debt with profit from the sales of company-owned stores. They are expected to generate about $550 million along with real estate sales worth about $400 million.

The move comes after the Glendale-based restaurant chain owner and operator reported that its same-store sales rose 2.5 percent for its second quarter and 1.6 percent for the first half of the year.

Shares in IHOP closed up $1.23, or 2 percent, to $62.47 in trading Tuesday on the New York stock Exchange.