More Dissent on IHOP-Applebee’s Deal

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Applebee’s International Inc. was sued by a shareholder claiming the planned $1.9 billion takeover by IHOP Corp. undervalues the restaurant chain owner.


The New Jersey Building Laborers Pension and Annuity Funds filed a complaint, which was filed in Delaware Chancery Court, that claims the deal “deprives Applebee’s shareholders of the massive financial benefits expected from Applebee’s transition to franchised-based” operations from company-owned facilities.


The complaint asked a judge to stop the sale and award damages and legal fees.


Overland Park, Kan.-based Applebee’s said July 16 it would be bought by Los Angeles-based causal dinning chain IHOP for $25.50 a share, a 4.6 percent premium at the time of the announcement.


This lawsuit follows an earlier complaint by Sardar Biglari, chief executive of Lion Fund LP and the Western Sizzlin Corp. restaurant chain, which owns roughly 1 million shares in Applebee’s or about 1.4 percent.


Biglari’s tone was similar, saying the Applebee’s board “made a grave mistake in agreeing to an undervalued bid for the entire company.”


Shares in IHOP dropped $1.17, or 1.8 percent, to $64.35 in afternoon trading Friday on the New York Stock Exchange.

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